40
$4 .KDQ 8UHQFR DQG WKH SUROLIHUDWLRQ RI QXFOHDU ZHDSRQV WHFKQRORJ\ 7KH V\PELRWLF UHODWLRQ EHWZHHQ QXFOHDU HQHUJ\ DQG QXFOHDU ZHDSRQV $ UHSRUW ZULWWHQ E\ -RRS %RHU +HQN YDQ GHU .HXU .DUHO .RVWHU DQG)UDQN6OLMSHU &RPPLVVLRQHGE\ ,QWHUQDWLRQDO 0D\

DQG QXFOHDU ZHDSRQV - Laka.org · $ 4 .kdq 8uhqfr dqg wkh surolihudwlrq ri qxfohdu zhdsrqv whfkqrorj\˛ 7kh v\pelrwlf uhodwlrq ehwzhhq qxfohdu hqhuj\ dqg qxfohdu zhdsrqv $ uhsruw

  • Upload
    others

  • View
    1

  • Download
    0

Embed Size (px)

Citation preview

� ��

��������$�4�� .KDQ�� 8UHQFR� DQG� WKH� SUROLIHUDWLRQ� RI�QXFOHDU� ZHDSRQV� WHFKQRORJ\�� �� 7KH� V\PELRWLF�UHODWLRQ� EHWZHHQ� QXFOHDU� HQHUJ\� DQG� QXFOHDU�ZHDSRQV����������$�UHSRUW�ZULWWHQ�E\� -RRS�%RHU��+HQN� YDQ�GHU�.HXU��.DUHO�.RVWHU�DQG�)UDQN�6OLMSHU����������&RPPLVVLRQHG�E\� ,QWHUQDWLRQDO�0D\�������

� ��

$%287�7+(�$87+256��-RRS�%RHU� ������� LV�&KDLU� RI�9�,�&�� �3HDFH� ,QIRUPDWLRQ�&HQWUH�� DW�*URQLQJHQ��$IWHU� VWXG\LQJ�ELRORJ\�DQG�WKH�HQYLURQPHQW�KH�FDPSDLJQHG�RQ�QXFOHDU�HQHUJ\�DQG�QXFOHDU�ZHDSRQV�SUROLIHUDWLRQ�LVVXHV�IRU����\HDUV��+H�LV�WKH�DXWKRU�RI�ERRNV�RQ�'XWFK�HQHUJ\�SROLF\��QXFOHDU�ZDVWH�LVVXHV�DQG�SUROLIHUDWLRQ� RI� XUDQLXP� HQULFKPHQW�� )URP� ����� WR� ����� KH� ZRUNHG� DW�:,6(�$PVWHUGDP�� DQ�LQWHUQDWLRQDO�DQWL�QXFOHDU�RUJDQLVDWLRQ��RQ�QXFOHDU�HQHUJ\�LVVXHV��)URP������KH�KDV�UXQ�D�VPDOO�FRQVXOWDQF\�SURPRWLQJ�VRODU�HQHUJ\�DV�ZHOO�DV�LQVWDOOLQJ�VRODU�HQHUJ\�FHOOV����,QJ�� +HQN� YDQ� GHU� .HXU� ������� LV� D� FKHPLFDO� HQJLQHHU� DQG� D� UHVHDUFKHU� RQ� QXFOHDU� HQHUJ\�LVVXHV��+H�ZRUNV�DW�WKH�'XWFK�'RFXPHQWDWLH�HQ�2QGHU]RHNVFHQWUXP�.HUQHQHUJLH��'RFXPHQWDWLRQ�DQG�5HVHDUFK�&HQWUH�RQ�1XFHODU�(QHUJ\���/DND�)RXQGDWLRQ��6LQFH�WKH�HDUO\�����V�KH�KDV�IRFXVHG�KLV�ZRUN�RQ�WKH�LQGXVWULDO�XVH�RI�GHSOHWHG�XUDQLXP��+H�KDV�ZULWWHQ�QXPHURXV�DUWLFOHV�DQG�SDSHUV�RQ�WKLV�ZDVWH�SURGXFW�IURP�WKH�XUDQLXP�HQULFKPHQW�LQGXVWU\��+H�LV�FR�IRXQGHU�DQG�VWDII�PHPEHU�RI�WKH�,QWHUQDWLRQDO�&RDOLWLRQ�WR�%DQ�8UDQLXP�:HDSRQV��,&%8:����'UV��.DUHO�.RVWHU� �0�$�� ������� LV�D�VRFLRORJLVW�� VSHFLDOLVLQJ� LQ� WKH� UHODWLRQVKLS�EHWZHHQ�ZDU��GLSORPDF\�DQG�SROLWLFDO�FKDQJH��+H�UXQV�WKH�1HWKHUODQGV�VHFWLRQ�RI�WKH�3URMHFW�RQ�(XURSHDQ�1RQ�1XFOHDU�3UROLIHUDWLRQ��3(11�1O��LQ�8WUHFKW��LV�D�PHPEHU�RI�WKH�H[HFXWLYH�RI�WKH�0LGGOH�3RZHUV�,QLWLDWLYH� �03,�� DQG� (XURSHDQ� FR�RUGLQDWRU� RI� WKH� 3DUOLDPHQWDULDQV� 1HWZRUN� RQ� 1XFOHDU�'LVDUPDPHQW��311'���+H�KDV�VSHFLDOLVHG�LQ�QXFOHDU�ZHDSRQV�LVVXHV�VLQFH�������ZLWK�HPSKDVLV�RQ� SROLWLFDO� DGYRFDF\� DQG� FR�RUGLQDWLRQ� RI� DQWL�QXFOHDU� FDPSDLJQLQJ�� QDWLRQDOO\� DQG�LQWHUQDWLRQDOO\��+H� LV� WKH� FR�DXWKRU� RI� ERRNV� DQG�SDSHUV� RQ�1$72��'XWFK� VHFXULW\� SROLF\�� WKH�SRVW�&ROG�:DU� RUGHU�� WKH�*XOI�:DU� DQG�7XUNH\� DQG�GHYHORSPHQWV� LQ�1$72�QXFOHDU�ZHDSRQV�SROLF\��+H�KDV�DOVR�SXEOLVKHG�YDULRXV�RSLQLRQ�SLHFHV�RQ�QXFOHDU�DUPV�LVVXHV�LQ�'XWFK�QHZVSDSHUV�DQG�SHULRGLFDOV���'UV��)UDQN�6OLMSHU��0�$����������ZRUNV�DW�WKH�'XWFK�&DPSDJQH�WHJHQ�:DSHQKDQGHO��&DPSDLJQ�DJDLQVW�$UPV�7UDGH��DQG�KDV�EHHQ�D�UHVHDUFKHU�DQG�FDPSDLJQHU�RQ�DUPV�WUDGH�LVVXHV�IRU�WKH�ODVW�WHQ� \HDUV�� +H� JUDGXDWHG� LQ� ����� DV� HFRQRPLVW� �LQWHUQDWLRQDO� HFRQRPLF� UHODWLRQV�� RQ� 'XWFK�PLOLWDU\�SURFXUHPHQW�DQG�WKH�RIIVHW�SROLFLHV�LPSOHPHQWHG�WR�HQKDQFH�WKH�GHIHQFH�LQGXVWU\��+H�KDV�ZULWWHQ�DQG�SXEOLVKHG�H[WHQVLYHO\�RQ�'XWFK�DUPV�H[SRUWV�DQG�SROLF\�HYHU�VLQFH��)RU�PDQ\�\HDUV�RQH�RI�WKH�IRFDO�SRLQWV�RI�KLV�ZRUN�KDV�EHHQ�WKH�DUPV�WUDGH�WR�,QGLD�DQG�3DNLVWDQ��0RVW�UHFHQWO\�KH�FR�DXWKRUHG��([SORVLHYH�PDWHULH��1HGHUODQGVH�ZDSHQKDQGHO�EORRWJHOHJG��>([SORVLYH�PDWHULDO���'XWFK� DUPV� WUDGH� UHYHDOHG�@�� D� XQLTXH� KDQGERRN�EDVHG�RQ��������SDJHV� RI� SUHYLRXVO\� VHFUHW�LQIRUPDWLRQ��UHOHDVHG�WKURXJK�WKH�'XWFK�)UHHGRP�RI�,QIRUPDWLRQ�$FW���

����� ����� ���� ����������� ���������� "!#�����%$&�('*)+��,%,%$�)

��)+�-�����������(.+$�,%���(.0/�� ,1'*� ��.0��)+��2

������ ����9�,�&��� �

� ��

35()$&(��*UHHQSHDFH� ,QWHUQDWLRQDO� KDV� FRPPLVVLRQHG� WKLV� UHSRUW� WR� SURYLGH� VRPH� LQVLJKW� LQWR� KRZ� RQH�SDUWLFXODU�FRXQWU\��3DNLVWDQ��SURFXUHG�WKH�WHFKQRORJ\�WR�VWDUW�LWV�QXFOHDU�SURJUDPPH����7KURXJK�WKH�KLVWRU\�RI�WKH�.KDQ�QHWZRUN�DQG�LWV�OLQNV�WR�8UHQFR��WKH�UHSRUW�KLJKOLJKWV�KRZ�HDVLO\�FLYLO� QXFOHDU� WHFKQRORJ\� FDQ� EH� DFTXLUHG� WKHQ� SXW� WR�PLOLWDU\� XVH�� 7KH� UHSRUW� DOVR� VKRZV� KRZ�HDVLO\�WKH�LQWHUQDWLRQDO�DQG�GRPHVWLF�H[SRUW�FRQWUROV�V\VWHP�IRU�FLYLO�QXFOHDU�WHFKQRORJ\�FDQ�EH�FLUFXPYHQWHG�WR�REWDLQ�WKH�PDWHULDOV�QHFHVVDU\�WR�PDQXIDFWXUH�QXFOHDU�ZHDSRQV���$V�WKH�DXWKRUV�RI�WKLV�UHSRUW�VWDWH���³7KH�UROH�SOD\HG�E\�8UHQFR�LQ�WKH�SUROLIHUDWLRQ�RI�QXFOHDU�WHFKQRORJ\�DV�GHVFULEHG�LQ�WKLV�SDSHU�LOOXVWUDWHV� FOHDUO\� WKDW� WKH� XVH� RI� WKLV� WHFKQRORJ\� IRU� SHDFHIXO� RU� PLOLWDU\� SXUSRVHV� FDQQRW� EH�VHSDUDWHG��)XUWKHUPRUH�� WKH�H[LVWLQJ�LQWHUQDWLRQDO�WUHDW\�REOLJDWLRQV��ZKLFK�FDOO� IRU�IUHH�DFFHVV�WR�QXFOHDU�WHFKQRORJ\�IRU�DOO�PHPEHU�FRXQWULHV�DQG�IRU�DSSO\LQJ�VDIHJXDUGV�WR�QXFOHDU�PDWHULDOV��KDYH� LQ� IDFW� REIXVFDWHG� DQ� H[WUHPHO\� LPSRUWDQW� IDFW�� WKH� GHYHORSPHQW� RI� QXFOHDU� SRZHU� DV� D�VRXUFH�RI�HQHUJ\�PDNHV�LW�SRVVLEOH�WR�FUHDWH�WKH�EDVLV�RI�D�QXFOHDU�ZHDSRQV�SURJUDP�´��&RQWUROOLQJ�ZKR�FDQ�KDYH�DFFHVV�WR�ZKDW�W\SHV�RI�QXFOHDU�WHFKQRORJ\�WKURXJK�$UWLFOH�,9�RI�WKH�QXFOHDU� 1RQ�3UROLIHUDWLRQ� 7UHDW\� ±� DV� PDQ\� DUH� VXJJHVWLQJ� �� LV� QRW� WKH� DQVZHU�� 7KH� URDG� WR�VWRSSLQJ� FRXQWULHV� DFTXLULQJ� WKH� WHFKQRORJ\� LV� QRW� WKURXJK� VD\LQJ� VRPH� FDQ� KDYH� LW� DQG� VRPH�FDQ¶W��$V� SDVW� KLVWRU\� KDV� WDXJKW� XV�� LI� FRXQWULHV� FDQQRW� DFTXLUH� WKLV� WHFKQRORJ\� WKURXJK� OHJDO�PHDQV�WKH\�ZLOO�DFTXLUH�LW�LOOHJDOO\��LI�WKH\�KDYH�SROLWLFDO�ZLOO��GHWHUPLQDWLRQ�DQG�HQRXJK�PRQH\�WR�SD\�IRU�LW���,I� WKH� LQWHUQDWLRQDO� FRPPXQLW\� LV� VHULRXV� DERXW� WDFNOLQJ� WKH� WKUHDW� RI� SROLIHUDWLRQ�� WKHUH� LV� DQ�XUJHQW� QHHG� WR� DJUHH� DQG� LPSOHPHQW� D� FRPSUHKHQVLYH� ILVVLOH� PDWHULDO� WUHDW\� WKDW� EDQV� WKH�SURGXFWLRQ�DQG�SRVVHVVLRQ�RI�SOXWRQLXP�DQG�KLJKO\�HQULFKHG�XUDQLXP����8OWLPDWHO\��RQO\�E\�HQGLQJ�WKH�QXFOHDU�DJH�ZLOO�WKH�WKUHDW�RI�D�QXFOHDU�EUHDNRXW�EH�FXUWDLOHG���

� ��

7$%/(�2)�&217(176�

7$%/(�2)�&217(176� ��

(;(&87,9(�6800$5<� ��7KH�.KDQ�1HWZRUN� ��7KH�8UHQFR�&RQQHFWLRQ� ��7KH�5LVN�RI�3UROLIHUDWLRQ� ��7KH�)XWXUH"� ��

,1752'8&7,21� ��

&+$37(5�,��.+$1¶6�'87&+�&211(&7,21� ��0DNLQJ�D�FDUHHU� ��%XLOGLQJ�D�(XURSHDQ�QHWZRUN� ���7KH�3DNLVWDQ�SLSHOLQH� ���$�JLIW�IURP�KHDYHQ� ���2IIVHW�SROLF\��'XWFK�FRPSRQHQWV�IRU�3DNLVWDQ¶V�QXFOHDU�GHOLYHU\�V\VWHPV� ���$�'XWFK�LQTXLU\� ���:KDW�UROH�IRU�WKH�3DNLVWDQL�JRYHUQPHQW"� ���2IILFLDO�VLOHQFH�DJDLQ� ���

&+$37(5�,,��.+$1¶6�6833257�1(7:25.� ���$�PRUDO�GXW\� ���2SHUDWLRQ�EXWWHU�IDFWRU\� ���1R�ER\V�FKRLU� ���

&+$37(5�,,,�85(1&2������������� ���.HHSLQJ�WKH�ZHDSRQV�RSWLRQV�RSHQ� ���3ODQV�IRU�WKH�IXWXUH� ���

&+$37(5�,9�85(1&2�$1'�352/,)(5$7,21� ���

� ��

$�GHOLYHU\�IRU�%UD]LO� ���3UROHPV�ZLWK�VHFXULW\� ���

&21&/86,21��7+(�137�',/(00$� ���%ODFN�PDUNHW�H[FXVHV� ���6WUDWHJLF�EOLQGQHVV� ���,QKHUHQW�FRQWUDGLFWLRQV� ���3RLQWV�IRU�D�SROLF\�GHEDWH� ���

$11(;�,��85(1&2�&25325$7(�6758&785(� ���7KH�SDVW�ELGV�RQ�8UHQFR� ���

$11(;�,,��85(1&2�$1'�7+(�8/75&(175,)8*(� ���8UHQFR�DQG�WKH�/LJKW�:DWHU�5HDFWRU� ����

� ��

(;(&87,9(�6800$5<��7KH�.KDQ�1HWZRUN�,W� LV�QRZ�ZHOO�NQRZQ�WKDW� WKH� IDWKHU�RI�3DNLVWDQV�QXFOHDU�ZHDSRQV�SURJUDPPH��$EGXO�4DGHHU��$4��.KDQ��KDG�KLV�VFLHQWLILF�URRWV�LQ�WKH�1HWKHUODQGV�LQ�WKH�����V�DQG���V��$W�WKDW�WLPH�KH�KDG�DFFHVV� WR� ZKDW� ZDV� VXSSRVHG� WR� EH� KLJKO\� VHFUHW� XUDQLXP� HQULFKPHQW� WHFKQRORJ\�� WKH� 8UHQFR�XOWUD� FHQWULIXJH� SURMHFW�� 7KDQNV� WR� VHFXULW\� SUREOHPV�� DV�ZHOO� DV� GHOLEHUDWH� DQG� XQZLWWLQJ� KHOS�IURP�IRUPHU�WHDFKHUV�DQG�FROOHDJXHV��KH�ZDV�DEOH�WR�EXLOG�D�JOREDO�QXFOHDU�LQIRUPDWLRQ�QHWZRUN�DQG�EXVLQHVV��)URP�3DNLVWDQ��XOWUDFHQWULIXJH�WHFKQRORJ\��NQRZOHGJH�DQG�PDWHULDOV��ZHUH�H[SRUWHG�WR� /LE\D�� ,UDQ� DQG� 1RUWK� .RUHD�� $� PL[WXUH� RI� OHJDO� DQG� LOOHJDO� WUDQVDFWLRQV�� LQYROYLQJ�EXVLQHVVPHQ�IURP�DOO�RYHU� WKH�ZRUOG�DV�ZHOO�DV� LQGLYLGXDOV� LQ� WKH�KLJKHU�FLUFOHV�RI� WKH�PLOLWDU\�DQG� SROLWLFDO� HOLWH� LQ� 3DNLVWDQ� DOORZHG� QXFOHDU� SUROLIHUDWLRQ� WR� SURFHHG� PXFK� IDVWHU� WKDQ� HYHQ�WKRVH�PRVW�IDPLOLDU�ZLWK�WKH�LVVXH�H[SHFWHG���7KH�8UHQFR�&RQQHFWLRQ�8UHQFR�� IRXQGHG� LQ� ������ LV� RQH� RI� WKH� ZRUOG¶V� OHDGLQJ� XUDQLXP� HQULFKPHQW� FRPSDQLHV��� $�'XWFK�*HUPDQ�%ULWLVK�FRQVRUWLXP��8UHQFR�XVHV� WKH�XOWUDFHQWULIXJH��8&��PHWKRG�WR�VHSDUDWH�WKH�XVHDEOH� ILVVLRQDEOH� XUDQLXP� IURP� WKH� QRQ�ILVVLRQDEOH� XUDQLXP�� 7KH� DGYDQFHG� XOWUDFHQWULIXJH�WHFKQRORJ\� GHYHORSHG� E\� 8UHQFR� XVHV� VLJQLILFDQWO\� OHVV� HOHFWULFLW\� WKDQ� JDV� GLIIXVLRQ��� ZKLFK�PDNHV� LW�PXFK�FKHDSHU��0RUHRYHU�� D�8&�HQULFKPHQW�SODQW� FDQ�EH�EXLOW� LQ�PRGXOHV�� LQ�FRQWUDVW�ZLWK� JDV� GLIIXVLRQ� SODQWV� ZKLFK� WHQG� WR� EH� ODUJH� IRRWEDOO� ILHOG� VL]HG� IDFLOLWLHV�� *LYHQ� WKH�FRPPHUFLDO� DGYDQWDJHV�RI� WKH�8&�PHWKRG�RI� HQULFKPHQW�RYHU�JDVHRXV�GLIIXVLRQ�PHWKRGV�� LW� LV�EHFRPLQJ�WKH�WHFKQRORJ\�RI�FKRLFH�DURXQG�WKH�ZRUOG�DQG�HOHYHQ�FRXQWULHV�QRZ�KDYH�8&�SODQWV�����$IWHU�PDQ\�\HDUV�RI�GHQ\LQJ�DFFXVDWLRQV�LQ�WKDW�GLUHFWLRQ��WKH�,$($�DQG�'XWFK�DXWKRULWLHV�KDYH�UHFHQWO\�FRQILUPHG�WKDW�WKLV�YHU\�WHFKQRORJ\�VHHPV�WR�KDYH�PDGH�LWV�ZD\�WR�,UDQ��/LE\D�DQG�1RUWK�.RUHD�DV�ZHOO�DV�3DNLVWDQ���0RUHRYHU�� LW� DSSHDUV� WKDW�XQWLO�YHU\� UHFHQWO\�.KDQ�XVHG� WKH� 'XWFK�EUDQFK� RI� KLV� LQWHUQDWLRQDO� QHWZRUN� RI� VXSSOLHUV� DQG� PLGGOHPHQ� IRU� 3DNLVWDQV� QXFOHDU�SURJUDPPH��$QG�RQH�'XWFKPDQ�LV�QRZ�XQGHU�LQYHVWLJDWLRQ�IRU�KDYLQJ�GHDOW�ZLWK�RQH�RI�WKH�RWKHU�FRXQWULHV�DV�ZHOO����7KH�5LVN�RI�3UROLIHUDWLRQ�7KHUH�DUH�WZR�VWHSV�LQ�WKH�FLYLO�QXFOHDU�FKDLQ�ZKLFK�DUH�PRVW�YXOQHUDEOH�ZLWK�UHJDUG�WR�QXFOHDU�SUROLIHUDWLRQ�� WKH� H[SRUW� RI� WHFKQRORJ\� IRU� XUDQLXP� HQULFKPHQW� DQG� WKH� UHSURFHVVLQJ� RI� VSHQW�QXFOHDU� IXHO�� 7KH� YXOQHUDELOLW\� RI� 8UHQFR¶V� VHFXULW\� PHDVXUHV� FHUWDLQO\� JRHV� D� ORQJ� ZD\� WR�H[SODLQLQJ� KRZ� LQWHUHVWHG� VWDWHV� DQG� QRQ�VWDWH� SDUWLHV� FRXOG� REWDLQ� D� QXFOHDU� DUVHQDO� YLD� FLYLO�QXFOHDU�WHFKQRORJ\�������������������������������������������������������������3 �%RHU��-RRS��8UDQLXP�HQULFKPHQW��1R�FDSDFLW\�JURZWK�LQ����\HDUV��:,6(�1HZV�&RPPXQLTXH����������2FW������������KWWS���ZZZ�DQWHQQD�QO�ZLVH��������������KWPO�4 �1($�2(&'��7UHQGV�LQ�WKH�1XFOHDU�)XHO�&\FOH�±�(FRQRPLF��(QYLURQPHQWDO�DQG�6RFLDO�$VSHFWV��2(&'��������S�����KWWS���ZZZ��RHFG�RUJ�SXEOLFDWLRQV�H�ERRN��������H�SGI�5 �%UD]LO��&KLQD��*HUPDQ\��,QGLD��,UDQ��,VUDHO��-DSDQ��WKH�1HWKHUODQGV��3DNLVWDQ��5XVVLD�DQG�WKH�8.��,Q�������/RXLVLDQD�(QHUJ\�6HUYLFHV��/(6��±�D�SDUWQHUVKLS�RI�VHYHUDO�PDMRU�QXFOHDU�HQHUJ\�FRPSDQLHV��LQFOXGLQJ�8UHQFR��,QF��D�ZKROO\�RZQHG�VXEVLGLDU\�RI�8UHQFR�/WG��:HVWLQJKRXVH�DQG�86�HQHUJ\�FRPSDQLHV�'XNH�3RZHU��(QWHUJ\�DQG�([HORQ�±�DQQRXQFHG�SODQV�IRU�D�1DWLRQDO�(QULFKPHQW�)DFLOLW\��1()��WR�EH�ORFDWHG�QHDU�(XQLFH��1HZ�0H[LFR��7KH�)UHQFK�HQULFKPHQW�FRPSDQ\�(XURGLI�DQQRXQFHG�LQ�'HFHPEHU������LW�ZLOO�DFTXLUH�D�ILIW\�SHUFHQW�VWDNH�LQ�8UHQFR¶V�HQULFKPHQW�WHFKQRORJ\�FRPSDQ\�DQG�VWDUWLQJ�FRQVWUXFWLRQ�RI�D�QHZ�8&�SODQW�DW�7ULFDVWLQ�LQ�������6 �³%HDQWZRRUGLQJ�NDPHUYUDJHQ�YDQ�KHW�OLG�:LOGHUV��99'��RYHU�KHW�RQWZHUS�YDQ�GH�XOWUDFHQWULIXJHV�LQ�,UDQ´�����MDQXDU\�������DW�ZZZ�PLQEX]D�QO��7 �$OEHUWV�DQG�.QLS���20�RQGHU]RHNW�SDUWQHU�.KDQ���15&�+DQGHOVEODG�����)HEUXDU\�������7KH�OLQN�ZLWK�/LE\D�ZDV�HDUOLHU�PDGH�E\�0DWW�.HOOH\���3DNLVWDQ��QXFOHDU�EODFN�PDUNHW�OLQNHG���$3�����)HEUXDU\�������

� ��

�7KH�)XWXUH"�86� 3UHVLGHQW� %XVK� LV� FXUUHQWO\� XVLQJ� WKH� .KDQ� GLVFORVXUHV� DV� MXVWLILFDWLRQ� IRU� SURKLELWLQJ� WKH�IXUWKHU� H[SRUW� RI� WHFKQRORJ\� IRU� XUDQLXP� HQULFKPHQW� DQG� UHSURFHVVLQJ�RI� VSHQW� QXFOHDU� IXHO� WR�FRXQWULHV� ZKLFK� GR� QRW� \HW� KDYH� WKLV� WHFKQRORJ\� DW� D� FRPPHULFDO� OHYHO�� 7KLV� PD\� \HW� EH� DQ�LPSRUWDQW� VWHS� LQ� GLPLQLVKLQJ� IXUWKHU� JOREDO� QXFOHDU� SUROLIHUDWLRQ��� 7KH� QXFOHDU� ZHDSRQV� DQG�DGYDQFHG�FLYLO�QXFOHDU�VWDWHV�KRZHYHU��DOUHDG\�RFFXS\�D�SULYLOHJHG�SRVLWLRQ�LQ�WKH�QXFOHDU�1RQ�3UROLIHUDWLRQ�7UHDW\��137��UHJLPH�FRPSDUHG�WR�RWKHU�VWDWHV��7KLV�GLVFULPLQDWLRQ��VLPSO\�LQFUHDVHV�WKH�ULVN�RI�SUROLIHUDWLRQ��DV�LW�FDQQRW�SUHYHQW�YHUWLFDO�SUROLIHUDWLRQ��E\�WKH�QXFOHDU�ZHDSRQV�VWDWHV��7KH�GHYHORSPHQW�RI�QHZ�QXFOHDU�ZHDSRQV�FXUUHQWO\�WDNLQJ�SODFH�LQ�WKH�86�IRU�H[DPSOH��LQFUHDVHV�WKH� ULVN� RI� D� UHQHZHG� QXFOHDU� DUPV� UDFH� DPRQJ� WKH� H[LVWLQJ� QXFOHDU� ZHDSRQV� VWDWHV�� 7KH�ZRUOGZLGH� DEROLWLRQ� RI� XUDQLXP� HQULFKPHQW� DQG� UHSURFHVVLQJ� RI� VSHQW� QXFOHDU� IXHO�� WKURXJK� D�FRPSUHKHQVLYH� ILVVLOH�PDWHULDO� WUHDW\� LV� WKH�RQO\� UHDO� DQVZHU� WR�GLPLQLVKLQJ� WKH� ULVN�RI�QXFOHDU�SUROLIHUDWLRQ����$QG�RI�FRXUVH��VXFK�PHDVXUHV�PXVW�EH�DFFRPSDQLHG�E\�WKH�DEROLWLRQ�RI�QXFOHDU�ZHDSRQV������

�����������������������������������������������������������8 �%XVK�VHHV�QXNH�FUDFNGRZQ��&%6�1HZV��)HE�����������KWWS���ZZZ�FEVQHZV�FRP�VWRULHV������������SROLWLFV�PDLQ�������VKWPO�9 �9HUWLFDO�SUROLIHUDWLRQ�UHIHUV�WR�QXFOHDU�SUROLIHUDWLRQ�ZLWKLQ�1XFOHDU�:HDSRQ�6WDWHV��LH�SURGXFWLRQ�RI�PRUH�RU�QHZ�QXFOHDU�ZHDSRQV�E\�WKRVH�VWDWHV�ZKR�DOUHDG\�KDYH�WKHP��FRPSDUHG�ZLWK�KRUL]RQWDO�SUROLIHUDWLRQ�ZKLFK�UHIHUV�WR�VWDWHV�ZKR�FXUUHQWO\�GRQ¶W�KDYH�QXFOHDU�ZHDSRQV�DFTXLULQJ�WKHP��

� ��

,1752'8&7,21��0RUH� WKDQ����\HDUV�DJR�86�3UHVLGHQW�'ZLJKW�'��(LVHQKRZHU�SUHVHQWHG�KLV�³$WRPV� IRU�3HDFH´�VSHHFK�EHIRUH�WKH�81�*HQHUDO�$VVHPEO\���+H�FDOOHG�RQ�WKH�8QLWHG�6WDWHV�DQG�WKH�6RYLHW�8QLRQ�³WR�PDNH�MRLQW�FRQWULEXWLRQV�IURP�WKHLU�VWRFNSLOHV�RI�QRUPDO�XUDQLXP�DQG�ILVVLRQDEOH�PDWHULDOV�WR�DQ� LQWHUQDWLRQDO� $WRPLF� (QHUJ\� $JHQF\´� DQG� WKHQ� ³GHYLVH� PHWKRGV� ZKHUHE\� WKLV� ILVVLRQDEOH�PDWHULDO� ZRXOG� EH� DOORFDWHG� WR� VHUYH� WKH� SHDFHIXO� SXUVXLWV� RI� PDQNLQG�´� +LV� VSHHFK� ZDV� WKH�VWDUWLQJ� VKRW� IRU� WKH� ZRUOG�ZLGH� GHYHORSPHQW� DQG� VSUHDG� RI� QXFOHDU� HQHUJ\�� WKH� FLYLOLDQ� E\�SURGXFW�RI�WKH�PDQXIDFWXUH�RI�QXFOHDU�ZHDSRQV����WKLV�ZDV�UHDOO\�D�FDPSDLJQ�WR�PDNH�WKH�QXFOHDU�LGHD�DFFHSWDEOH������%HFDXVH�RI�WKH�ULVNV�LQKHUHQW�LQ�WKH�VSUHDG�RI�QXFOHDU�WHFKQRORJ\��NQRZOHGJH�DQG�ILVVLOH�PDWHULDO��D�JOREDO�QXFOHDU�ZDWFKGRJ�� WKH� ,QWHUQDWLRQDO�$WRPLF�(QHUJ\�$JHQF\��,$($��ZDV�HVDEOLVKHG� LQ������ DQG� LQ� ������ WKH� QXFOHDU�1RQ�3UROLIHUDWLRQ� 7UHDW\� �137�� HQWHUHG� LQWR� IRUFH����8QGHU� WKH�137��WKH�,$($�ZDV�JLYHQ�WKH�SRZHUV�RI�VDIHJXDUGV�DQG�LQVSHFWLRQ�IRU�WKH�QRQ�QXFOHDU�ZHDSRQV�VWDWHV��7R�IDFLOLWDWH�WKH�SHDFHIXO�XVH�RI�QXFOHDU�HQHUJ\��86�OHJLVODWLRQ�ZDV�DOVR�DPHQGHG�WR�UHGXFH�QXFOHDU�VHFUHF\��DOORZLQJ�QXFOHDU�WHFKQRORJ\��PDWHULDO�DQG�NQRZOHGJH�WR�EH�H[SRUWHG�WR�IULHQGO\�VWDWHV�� DSSURYHG� DQG� DXWKRULVHG� E\� ZKDW� ZDV� WKHQ� WKH� $WRPLF� (QHUJ\� &RPPLVVLRQ�� QRZ� WKH�1XFOHDU�5HJXODWRU\�&RPPLVVLRQ������7KH� KLVWRU\�RI� WKH� ,$($�DQG� WKH�137�GHPRQVWUDWHV� WKDW� WKH� SURPRWLRQ�RI� WKH� SHDFHIXO� XVH� RI�QXFOHDU�HQHUJ\�LV�D�P\WK��,Q�IDFW�LW�KDV�DFFHOHUDWHG�QXFOHDU�SUROLIHUDWLRQ�IRU�PLOLWDU\�SXUSRVHV��7KH�UHFHQW�GLVFORVXUHV�RQ�WKH�QXFOHDU�QHWZRUN�HPDQDWLQJ�IURP�3DNLVWDQ�DQG�WKH�KLVWRU\�RI�WKH�%ULWLVK�'XWFK�*HUPDQ�XUDQLXP�HQULFKPHQW�FRQVRUWLXP�8UHQFR�VXSSRUW�WKLV����7KLV�SDSHU�DWWHPSWV�WR�GHWDLO�WKH�H[WHQW�RI�WKH�SUROLIHUDWLRQ�RI�8UHQFR�HQULFKPHQW�WHFKQRORJ\�RYHU�WKUHH� GHFDGHV�� &KDSWHUV� ,� DQG� ,,� SURYLGH� D� GHWDLOHG� UHFRQVWUXFWLRQ� RI� .KDQ¶V� QXFOHDU� QHWZRUN�ZKLFK� EHJDQ�ZLWK� KLP� LOOLFLWO\� DFTXLULQJ� GHWDLOHG� NQRZOHGJH� DQG� GRFXPHQWDWLRQ� IURP�8UHQFR��&KDSWHU� ,,,�GHVFULEHV� WKH�RULJLQ� DQG�KLVWRU\�RI�8UHQFR� DQG�&KDSWHU� ,9� LWV� VKDUH� LQ�ZRUOG�ZLGH�QXFOHDU� SUROLIHUDWLRQ�� )LQDOO\� LQ� FRQFOXVLRQ� WKH� DXWKRUV� SUHVHQW� UHFRPPHQGDWLRQV� QHFHVVDU\�� LQ�WKHLU�YLHZ��WR�UHGXFH�WKH�WKUHDW�SRVHG�E\�WKH�SUROLIHUDWLRQ�RI�HQULFKPHQW�WHFKQRORJ\����

�����������������������������������������������������������: �$WRPV�IRU�3HDFH�$GGUHVV�E\�'ZLJKW�'��(LVHQKRZHU�3UHVLGHQW�RI�WKH�8QLWHG�6WDWHV�RI�$PHULFD��*LYHQ�WR�WKH����WK�3OHQDU\�0HHWLQJ�RI�WKH�8QLWHG�1DWLRQV�*HQHUDO�$VVHPEO\�RQ�7XHVGD\����'HFHPEHU�������KWWS���ZZZ�LISDHQHUJ\FRQIHUHQFH�FRP�SGI�VSHHFK�SGI�; �:HLVV��/HRQDUG��$WRPV�IRU�3HDFH��7KH�%XOOHWLQ�RI�WKH�$WRPLF�6FLHQWLVWV��1RYHPEHU�'HFHPEHU�������9RO������1R�����S�����KWWS���ZZZ�WKHEXOOHWLQ�RUJ�LVVXHV������QG���QG��ZHLVV�KWPO�3=< �.ROOHUW��5RODQG��/DWHQWHQ�3UROLIHUDWLRQ�3%3 �KWWS���ZZZ�IDV�RUJ�QXNH�FRQWURO�QSW�EDFN�KWP�3>4 �:HLVV��SS�������

� ��

&+$37(5�,��.+$1¶6�'87&+�&211(&7,21��0DNLQJ�D�FDUHHU�%RUQ�LQ�WKH�,QGLDQ�WRZQ�RI�%KRSDO�LQ�������$4�.KDQ�DQG�KLV�IDPLO\�PRYHG�WR�3DNLVWDQ�LQ������DQG� LQ� ����� .KDQ� VWDUWHG� KLV� VFLHQWLILF� WRXU� WKURXJK� (XURSH� LQ� :HVW�%HUOLQ�� VWXG\LQJ� DW� WKH�7HFKQLVFKH�8QLYHUVLWlW��+H�FRQWLQXHG�DW�WKH�7HFKQLVFKH�+RJHVFKRRO��QRZ�8QLYHUVLWHLW��'HOIW�LQ�WKH�1HWKHUODQGV�IURP�������ZKHUH�KLV�PHQWRU�ZDV�WKH�LQWHUQDWLRQDOO\�UHQRZQHG�SK\VLFLVW�SURI��GU��:�*��%XUJHUV��.KDQ�UHFHLYHG�KLV�06F�GHJUHH�LQ�PHWDOOXUJLFDO�HQJLQHHULQJ�WKHUH�LQ�������/DWHU�KH� VWDWHG�� �,�JRW� WKH�EHVW�HQJLQHHUV� VWXG\� LQ�'HOIW��RQH�RI� WKH�EHVW�XQLYHUVLWLHV� LQ� WKH�ZRUOG�����8QGHU�WKH�ZLQJV�RI�SURI��GU��0DUWLQ�-��%UDEHUV��KLPVHOI�D�IRUPHU�SXSLO�RI�%XUJHUV��KH�UHFHLYHG�D�3K�'��LQ�PHWDOOXUJ\�IURP�WKH�&DWKROLF�8QLYHUVLW\�RI�/HXYHQ��%HOJLXP��LQ������ZLWK�D�VWXG\�RQ�WKH� HODVWLFLW\� RI� PHWDO� DOOR\V���� %UDEHUV� DQG� .KDQ� FR�HGLWHG� �7RSLFV� LQ� 3K\VLFDO� 0HWDOOXUJ\���SXEOLVKHG�LQ�$XJXVW���������,Q� 0D\� ����� .KDQ� VWDUWHG� ZRUN� DW� )'2���� D� VXEVLGLDU\� RI� 90)��� LQ� $PVWHUGDP�� KLJKO\�UHFRPPHQGHG� E\� WKH� HQJLQHHU� $�� /DQJVWUDDW�� DQ� ROG� IULHQG� IURP� KLV� WLPH� LQ� 'HOIW���� 6HFXULW\�FOHDUDQFH�IRU�WKLV�VHQVLWLYH�MRE��IURP�WKH�'XWFK�,QWHUQDO�6HFXULW\�6HUYLFH�%9'��QRZ�WKH�$,9'���ZDV�QHFHVVDU\�EHFDXVH�)'2�ZDV�D�PDMRU�VXEFRQWUDFWRU�IRU�XOWUD�FHQWULIXJH��8&��UHODWHG�ZRUN�DW�8UHQFRV� VXEVLGLDU\� 8&1��� LQ� $OPHOR�� .KDQ� JRW� WKH� FOHDUDQFH� ZLWKRXW� SUREOHPV�� 90)�:HUNVSRRU� ZDV� WKH� SODFH� ZKHUH� LQ� ����� -DFRE� .LVWHPDNHU�� WKH� 'XWFK� IDWKHU� RI� WKH� 8&�WHFKQRORJ\��EXLOW�KLV�ILUVW�FHQWULIXJHV�IRU�HQULFKLQJ�XUDQLXP�����7KRXJK�.KDQ�ZDV�VXSSRVHG�WR�ZRUN�ZLWK�PDWHULDO�WKDW�ZDV�XOWLPDWHO\�ODEHOOHG��FRQILGHQWLDO���KH�VRRQ� IRXQG�KLPVHOI� DPLGVW� DOO�NLQGV�RI� VHFUHW� LQIRUPDWLRQ��ERWK�DW�)'2��)0$��� DQG�8&1��+H�ZDV�HYHQ�DOORZHG�WR�WDNH�KRPH�FRPSOHWH�GRVVLHUV�IURP�)'2����+H�YLVLWHG�8&1�IRU�WKH�ILUVW�WLPH�RQ� �� DQG� ��0D\� ����� DQG� LQ� ����� VSHQW� ��� GD\V� LQ� WKH� �EUDLQER[�� �D� WHPSRUDU\� EXLOGLQJ�� LQ�$OPHOR�� WUDQVODWLQJ� VHFUHW�*HUPDQ� UHSRUWV� RQ� QHZ� GHYHORSPHQWV� LQ� XOWUDFHQWULIXJH� WHFKQRORJ\�LQWR�'XWFK����$OWKRXJK�DW�RQH�VWDJH�KH�ZDV�VHHQ�WDNLQJ�QRWHV�LQ�8UGX��KLV�H[SODQDWLRQ�WKDW�KH�ZDV�ZULWLQJ�D�SHUVRQDO�OHWWHU�ZDV�DFFHSWHG����$FFRUGLQJ�WR�WKH�JRYHUQPHQWDO�UHSRUW�RQ�WKH�.KDQ�FDVH�WKHUH�ZDV� ³DQ� RSHQ� DWPRVSKHUH´�ZLWKLQ� WKH� JURXS� RI� WHFKQLFLDQV� LQ� WKH� EUDLQER[��$OVR� GXULQJ�WKHVH� GD\V�� KH� ZDV� IUHH� WR� HQWHU� WKH� �FODVVLILHG�� 8&�SODQW� LWVHOI�� DV� WKH� FDQWHHQ� DQG� VDQLWDU\�IDFLOLWLHV�ZHUH�WKHUH��1RERG\�VHHPHG�WR�EH�ERWKHUHG��DV�HYHU\ERG\�KDG�JRRG�IDLWK�LQ�.KDQ������

�����������������������������������������������������������3=5 �+DUP�(GH�%RWMH�DQG�.R�&ROLMQ���'H�YDGHU�YDQ�GH�LVODPLWLVFKH�ERP�YHUNODDUW�]LFK�QDGHU���9ULM�1HGHUODQG�����-XO\�������$V�IRU�WKH�UHVW�RI�WKLV�DUWLFOH��DOO�WUDQVODWLRQV�IURP�'XWFK�ODQJXDJH�VRXUFHV�DUH�WKH�DXWKRUV��3>6 �6HH�H�J��'DYLG�0F0XOOLQ���78�'HOIWV�'U��6WUDQJHORYH���'HOWD��YRO�����QU������������DW�ZZZ�GHOWD�WXGHOIW�QO��$OVR�-DQ�3LMSHU�DQG�+XJR�6FKQHLGHU���:DW�.KDQ�NRQ��NRQ�.KDQ�QRRLW�DOOHHQ����GH�9RONVNUDQW�����0DUFK�������3 7 �)\VLVFK�'\QDPLVFK�2QGHU]RHNVODERUDWRULXP��RU�3K\VLFDO�'\QDPLF�5HVHDUFK�ODERUDWRU\��IRXQGHG�DV�LQ�KRXVH�ODERUDWRU\�LQ�������3=8 �:HUNVSRRU�DQG�6WRUN�PHUJHG�LQ������LQWR�90)��9HUHQLJGH�0DFKLQHIDEULHNHQ���ZKLFK�LQ������EHFDPH�6WRUN�DJDLQ��7KURXJKRXW�WKH�OLWHUDWXUH�90)�LV�DOVR�RIWHQ�FDOOHG�90)�:HUNVSRRU�DQG�90)�6WRUN��VRPHWLPHV�UHIHUULQJ�WR�WKHLU�IRUPHU�QDPH��3 9 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������7KRXJK�WKH�JRYHUQPHQW�UHSRUW�RQ�.KDQ�FODLPV�WKDW�LW�ZDV�D�QRUPDO�DSSOLFDWLRQ�SURFHGXUH��WKH�YDFDQF\�ZDV�QRW�DGYHUWLVHG���2QGHU]RHN��]DDN�.KDQ���7ZHHGH�.DPHU��YHUJDGHUMDDU�������������������QUV�������S������3?: �8OWUD�&HQWULIXJH�1HGHUODQG��ZKLFK�ZDV�VHW�XS�LQ��������3=; �+HQN�7ROVPD���1LHXZH�+HOGHQ���7HFKQLVFK�:HHNEODG�����-DQXDU\�������4�< �)LMQ�0HFKDQLVFKH�$IGHOLQJ��DQRWKHU�90)�GHSDUWPHQW�WKDW�SURGXFHG�DQG�DVVHPEOHG�HQJLQH�SDUWV�IRU�WKH�'XWFK�XOWUDFHQWULIXJHV��4�3 ��'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S�����4%4 ��'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S�����)ULWV�9HHUPDQ�DQG�-DFTXHV�5RV���$WRRPVSLRQDJH���&HQWHU�%RHN��:HHVS��������S�����4�5 ��'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S�����4%6 ��'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S�����

� ���

.KDQ�FRQWLQXHG�WR�ZRUN�DW�)'2�XQWLO�ODWH�������XVLQJ�WKH�RSSRUWXQLWLHV�WR�H[SDQG�KLV�NQRZOHGJH�RI�WKH�QHWZRUN�RI�8UHQFR�VXEFRQWUDFWRUV�DQG�RWKHU�FRPSDQLHV��6XVSLFLRQ�DURVH�LQ�KLV�ODVW�\HDU�LQ�WKH�1HWKHUODQGV��DIWHU�D�QXPEHU�RI�LQFLGHQWV�DWWUDFWHG�WKH�DWWHQWLRQ�RI�WKH�DXWKRULWLHV����DQG�KH�ZDV�SURPRWHG� LQ� 2FWREHU� ����� WR� D� GLIIHUHQW� IXQFWLRQ� LQ� WKH� FRPSDQ\� WR� NHHS� KLP� DZD\� IURP�XUDQLXP�HQULFKPHQW�ZRUN��1R�IRUPDO�LQYHVWLJDWLRQ�ZDV�ODXQFKHG�DV�WKHUH�VHHPHG�WR�EH�QR�KDUG�HYLGHQFH�IRU�DQ\�ZURQJ�GRLQJ��GHVSLWH�VLJQDOV�WR�WKH�FRQWUDU\�IURP�D�ZKLVWOHEORZHU���.KDQ��KLV�ZLIH�+HQGULQD���DQG�GDXJKWHUV�'LQD�DQG�$\VKD�OHIW�IRU�,VODPDEDG�IRU�KROLGD\V�RQ����'HFHPEHU�������$�FDVH�RI�\HOORZ� IHYHU�NHSW�KLP� WKHUH� IRU�DW� OHDVW� WZR�PRQWKV�DFFRUGLQJ� WR�D�OHWWHU�WKDW�KLV�ZLIH�ZURWH�WR�IULHQGV����6RPH�WLPH�ODWHU�.KDQ�KLPVHOI�VHQW�KLV�UHVLJQDWLRQ�OHWWHU�WR�)'2��ZKHUH�KLV�MRE�IRUPDOO\�HQGHG�RQ���0DUFK��������,Q�WKRVH�WKUHH�DQG�D�KDOI�\HDUV�DW�)'2�.KDQ�FROOHFWHG�DQG�FRSLHG�WKH�PRVW�LPSRUWDQW�GRFXPHQWV�QHHGHG�WR�HQDEOH�KLV�FRXQWU\�WR�EXLOG�LWV�RZQ�FHQWULIXJHV�IRU�XUDQLXP�HQULFKPHQW���HVVHQWLDO�IRU�µ3URMHFW����¶��WKH�FUHDWLRQ�RI�3DNLVWDQV�QXFOHDU�FDSDELOLW\��+LV�KRPH�FRXQWU\�KLJKO\�DSSUHFLDWHG�KLV� 'XWFK� ZRUN� DQG� $4� .KDQ� EHFDPH� WKH� PDLQ� DUFKLWHFW� RI� 3DNLVWDQV� QXFOHDU� ZHDSRQV�SURJUDPPH���%XLOGLQJ�D�(XURSHDQ�QHWZRUN�,Q� -XO\�������6�$��%XWW� �� D�SK\VLFLVW�WXUQHG�GLSORPDW� ��ZDV�SRVWHG�DW� WKH�3DNLVWDQL� HPEDVV\� LQ�%UXVVHOV��%HOJLXP�� LQ�FKDUJH�RI�EX\LQJ� WKH�QHFHVVDU\� WRROV��SDUWV�DQG�PDWHULDOV� �PRVWO\�VSHFLDO�VWHHO�DQG�DOXPLQLXP��LQ�(XURSH����/DWHU�KH�ZDV�MRLQHG�E\�,NUDP�XO�+DT�.KDQ��QR�UHODWLRQ���ZLWK�ZKRP� KH�ZRUNHG� DW�:DWFKEHUJ�3HFK�� QHDU� %RQQ� LQ�*HUPDQ\��$�4��.KDQ� KLPVHOI� UHWXUQHG� WR�%HOJLXP�LQ������IRU�QHJRWLDWLRQV�ZLWK�%HOJR�1XFOHDU�IRU�SXUFKDVLQJ�VR�FDOOHG�JORYH�ER[HV��WKDW�SURWHFW� DJDLQVW� UDGLDWLRQ���� ([SRUW� FRQWUROV� ZHUH� HDVLO\� E\SDVVHG�� DV� WUXVWHG�� PRVWO\� ZHVWHUQ�LQWHUPHGLDULHV� SODFHG� WKH� RUGHUV�� 7KRXJK� WKH� &,$� �DQG� RWKHU� LQWHOOLJHQFH� VHUYLFHV�� ZHUH�VXSSRVHGO\�DZDUH�RI�3DNLVWDQV�SXUFKDVHV��DOO�ZHQW�VPRRWKO\�XQWLO�������ZKHQ�LW�EHFDPH�DSSDUHQW�WKDW� WKH�%ULWLVK�VXEVLGLDU\�RI�(PHUVRQ�(OHFWULF� VROG� WR�3DNLVWDQ� KLJK�IUHTXHQF\� LQYHUWHUV��ZLWK�WKH�VDPH�VSHFLILFDWLRQV�DV�WKRVH�XVHG�E\�%ULWLVK�1XFOHDU�)XHO�/WG��WR�HQULFK�XUDQLXP��%HIRUH�ORQJ�DQ�LQYHVWLJDWLRQ�ZDV�ODXQFKHG�DQG�HOVHZKHUH�LQ�(XURSH�DODUP�EHOOV�VWDUWHG�ULQJLQJ�����7KH�3DNLVWDQ�SLSHOLQH�(YHQ� EHIRUH� .KDQ� OHIW� WKH�1HWKHUODQGV�� FRPSDQLHV�ZHUH� DSSURDFKHG� ZLWK� OLVWV� RI� FRPSRQHQWV�QHHGHG�IRU�3DNLVWDQV�8&�SURMHFW��2QH�FRPSDQ\�WKDW�ZDV�SDUWLFXODUO\�HDJHU�WR�PDNH�D�SURILW�ZDV�9DQ�'RRUQHV�7UDQVPLVVLH��9'7��LQ�7LOEXUJ��,Q� WKH� ODWH���¶V�9'7�ZRUNHG�RQ�D�GHDO� WR�VXSSO\�������PDUDJLQJ� VWHHO� WXEHV� IRU� WKH� FHQWULIXJHV�� RUGHUHG�E\�6�$��%XWW����'XULQJ�ZKDW�PD\�KDYH�EHHQ� KLV� ILUVW� WULS� EDFN� WR� WKH� 1HWKHUODQGV� DIWHU� KLV� UHWXUQ� WR� 3DNLVWDQ�� .KDQ� YLVLWHG� 9'7� LQ������������������������������������������������������������4 7 �2QH�RI�WKHP�LV�DQ�RUGHU�WKDW�D�'XWFK�FRPSDQ\�UHFHLYHG�IURP�WKH�3DNLVWDQL�HPEDVV\�LQ�%UXVVHOV�IRU�VSHFLDO�IRLO��ZKLFK�H[LVWHQFH�FRXOG�DOPRVW�FHUWDLQO\�RQO\�EH�NQRZQ�WKURXJK�.KDQ��$�GHDO�QHYHU�PDWHULDOLVHG��6HH�DOVR��'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S��������4�8 �+HQQ\�'RQNHUV�E\�ELUWK��DFFRUGLQJ�WR�RQH�VRXUFH�VKH�LV�WKH�GDXJKWHU�RI�D�'XWFK�GLSORPDW�ZKR�ZRUNHG�PDQ\�\HDUV�LQ�$IULFD�DQG�EHFDXVH�RI�WKDW�VKH�KDV�D�%ULWLVK��6RXWK�$IULFDQ�DQG�'XWFK�SDVVSRUW��*URHQH�$PVWHUGDPPHU�����)HEUXDU\���������4 9 �)ULWV�9HHUPDQ�DQG�-DFTXHV�5RV���$WRRPVSLRQDJH���&HQWHU�%RHN��:HHVS��������S������4@: �7KRXJK�WKH�'XWFK�FRQQHFWLRQ�LV�HPSKDVL]HG�KHUH��D�KRVW�RI�(XURSHDQ�FRPSDQLHV�ZHUH�PRUH�WKDQ�HDJHU�WR�VXSSO\�ZKDWHYHU�3DNLVWDQV�ZLVK�OLVW�FRQWDLQHG��7R�PHQWLRQ�D�IHZ��6ZLVV�FRPSDQLHV�9DNNXXP�$SSDUDWH�7HFKQLN��QRZ�DJDLQ�LQ�WKH�VSRWOLJKW�DV�8UV�7DQQHU��WKH�VRQ�RI�WKH�WKHQ�GLUHFWRU�)ULHGULFK�7DQQHU��WXUQV�RXW�WR�KDYH�EHHQ�ZRUNLQJ�IRU�WKH�0DOD\VLDQ�FRPSDQ\�6&23(��ZKLFK�EXLOW�SDUWV�IRU�/LE\DV�XOWUD�FHQWULIXJH�SURJUDPPH��DQG�&RUD�(QJLQHHULQJ��$OEUHFKW�0LJXOHV�&(6�.DOWKRII�*PE+�LQ�*HUPDQ\��7HDP�,QGXVWULHV��/HRQEHUJ��*HUPDQ\��VHUYHG�DV�VXSSOLHUV�IRU�WKH�3DNLVWDQL�QXFOHDU�SURJUDPPH�DW�OHDVW�GXULQJ�WKH�ODWH�����V��4�; �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������5%< �9HHUPDQ�DQG�5RV��S��������5&3 �%XWWV�LQYROYHPHQW�LV�PHQWLRQHG�E\�-DFR�$OEHUWV�DQG�.DUHO�.QLS���'H�YULHQG�YDQ�HHQ�DWRRPVSLRQ���15&�+DQGHOVEODG�����)HEUXDU\�������

� ���

��������:LWKLQ�WKH�FRPSDQ\�WKH�RUGHU�ZDV�FRPPRQO\�NQRZQ�DV�WKH�3DNLVWDQ�SLSHOLQH��7KH�WXEHV�ZHUH�H[SRUWHG�EHWZHHQ���1RYHPEHU������DQG����6HSWHPEHU�������2Q�WKLV�ODWHU�GDWH�D�VKLSPHQW�RI����� WXEHV�ZDV�VWRSSHG�DW�6FKLSKRO�$LUSRUW����7KRXJK�WKH�0LQLVWU\�RI�(FRQRPLF�$IIDLUV�ZDV�ZHOO�DZDUH�RI�WKH�GHDO�DQG�KDG�HYHQ�ZDUQHG�9'7�VHYHUDO�WLPHV�QRW�WR�GHOLYHU��9'7�VLPSO\�ZHQW�DKHDG�DQG�ZDV�VWRSSHG�RQO\�\HDUV�ODWHU��$W�ILUVW�WKH�FRPSDQ\�FODLPHG�WKDW�WKH�PDWHULDOV�ZHUH�IRU�DJULFXOWXUDO�SXUSRVHV��%XW� LQ�FRXUW� LW� WXUQHG�RXW� WKDW� LQ������ LW�KDG�DGPLWWHG� WR�RIILFLDOV� WKDW� LW�NQHZ�WKH�RUGHU�ZDV�IRU�.KDQ�DV�RUGHUV�KDG�FRPH�IURP�WKH�3DNLVWDQL�HPEDVV\�LQ�%RQQ��*HUPDQ\��+RZHYHU��GLUHFWRU�+DPVWUD�3LN�VXFFHVVIXOO\�FODLPHG�WKDW�QR�OLFHQFH�ZDV�QHHGHG�IRU�WKH�H[SRUWV����7KRXJK� WKH�'XWFK�SDUOLDPHQWDU\�FRPPLVVLRQ�RQ� WKH�.KDQ�DIIDLU�FRQFOXGHG� WKDW� WKH� WXEHV�ZHUH��HVVHQWLDO�IRU�WKH�VHW�XS�RI�D�8�&�SURMHFW�����'XWFK�ODZ�ZDV�RQ�9'7V�VLGH��$V�WKH�WXEHV�ZHUH�QRW��VSHFLILFDOO\� GHYHORSHG�� IRU� XVH� LQ� JDV� FHQWULIXJHV�� QR� H[SRUW� OLFHQFH�ZDV� QHHGHG�� UHYHDOLQJ� D�PDMRU� ORRSKROH� LQ� WKH� H[SRUW� ODZ�� 7KH� FDVH� ZDV� SDUWLFXODUO\� HPEDUUDVVLQJ� IRU� WKH� 'XWFK�DXWKRULWLHV�DV�WKH\�KDG�D�ODUJH�VKDUH�LQ�9'7�DQG�KDG�VSHQW�PLOOLRQV�RI�GROODUV�WR�VXEVLGLVH�ZKDW�ZDV� VXSSRVHG� WR� EH� WKH� FRPSDQ\V� PDLQ� EXVLQHVV�� WKH� GHYHORSPHQW� RI� YDULDEOH� WUDQVPLVVLRQ�V\VWHPV�IRU�FDUV���$�JLIW�IURP�KHDYHQ�)'2�DOVR� DSSHDUHG� LQ� FRXUW� DV� D� FRQVHTXHQFH� RI� WKH�JRYHUQPHQWV� LQYHVWLJDWLRQ� LQWR� WKH�.KDQ�FDVH��,W�ZDV�UHYHDOHG�WKDW�LQ������LW�DOORZHG�WKH�VDOH�WR�3DNLVWDQ�RI�VSHFLDOO\�GHVLJQHG�PHDVXULQJ�LQVWUXPHQWV�� RULJLQDOO\� PDGH� IRU� 8UHQFR��:KHQ� 8UHQFR� GURSSHG� WKH� RUGHU�� 3DNLVWDQV� LQWHUHVW�FDPH�OLNH��D�JLIW�IURP�KHDYHQ�����,Q������)'2V�GLUHFWRU�DQG�VDOHV�PDQDJHU�ZHUH�LQGLFWHG�IRU�QRW�KDYLQJ� REWDLQHG� DQ� H[SRUW� OLFHQFH�� $� \HDU� ODWHU� ERWK� ZHUH� DFTXLWWHG� �� WKH� FRXUW� UHMHFWHG� WKH�DUJXPHQW�WKDW�EHFDXVH�WKH�HPEHGGHG�UHVWULFWHG�GHYLFHV�QHHGHG�D� OLFHQFH�� WKH�FRPSOHWH�PDFKLQH�QHHGHG�RQH�WRR���&�0��.X\V��)'2�VDOHV�PDQDJHU�IURP������������WUDYHOOHG�WR�3DNLVWDQ�LQ������IRU�WKH�GHDO��ZRUWK��������HXUR�DQG�VWD\HG�DW�.KDQV�KRXVH��7R�D�'XWFK�MRXUQDOLVW�KH�VWDWHG�LQ�HDUO\������WKDW�KH�KDG�DOVR�YLVLWHG�.KDQ�LQ�������LQ�FRRSHUDWLRQ�ZLWK�WKH�'XWFK�VHFXULW\�VHUYLFH�%9'��WR�PDNH�FOHDU�WKDW�KH� �VKRXOG� QRW� ERWKHU� XV� DQ\� PRUH��� DVNLQJ� IRUPHU� FROOHDJXHV� IRU� KHOS� ZLWK� VHQVLWLYH�LQIRUPDWLRQ���� 7KH� UHDVRQ� WKDW� KH�PDGH� D� VDOHV� YLVLW� WR�.KDQ� WKH� QH[W� \HDU�ZDV� EHFDXVH� �WKDW�PHDVXULQJ� HTXLSPHQW� ZDV� LQQRFHQW�� ZH� FRXOG� GHOLYHU� WKDW� WR� KLP��� 6RRQ� WKRXJK� LW� EHFDPH�DSSDUHQW�WKDW�LW�GLG�KDYH�VRPHWKLQJ�WR�GR�ZLWK��WKH�DIIDLU����2IIVHW�SROLF\��'XWFK�FRPSRQHQWV�IRU�3DNLVWDQ¶V�QXFOHDU�GHOLYHU\�V\VWHPV�2IWHQ�RYHUORRNHG�DUH�WKH�OHJDO��JRYHUQPHQW�VDQFWLRQHG�VDOHV�RI�QXPHURXV�FRPSRQHQWV�E\�'XWFK�FRPSDQLHV��� IRU� WKH����3DNLVWDQL�)���V� WKDW�ZHUH�RUGHUHG� LQ������� WKH�\HDU�RI� WKH�.KDQ�UHSRUW��7KRXJK� 1RUZD\� �D� SDUWQHU� LQ� WKH� )���� SURMHFW�� UDLVHG� REMHFWLRQV� WR� WKH� VDOH�� WKH� 'XWFK�JRYHUQPHQW�JDYH�WKH�JR�DKHDG��GHVSLWH�WKH�FRPPRQ�NQRZOHGJH�WKDW�)���V�DUH�FDSDEOH�RI�QXFOHDU�WDVNV���DQG�WKDW�3DNLVWDQ�ZDV�PRYLQJ�DKHDG�RQ�WKH�URDG�WRZDUGV�QXFOHDULVDWLRQ��$�QHZ�EDWFK�RI����ILJKWHU�SODQHV�ZDV�RUGHUHG�LQ�������EXW�FDQFHOOHG�LQ�2FWREHU�������ZKHQ�WKH�86�JRYHUQPHQW������������������������������������������������������������5�4 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������5%5 �.R�&ROLMQ�HQ�3DXO�5XVPDQ��FKDSWHU�����LQ��+HW�1HGHUODQGVH�ZDSHQH[SRUWEHOHLG�������������1LMJK��9DQ�'LWPDU�8QLYHUVLWDLU��7KH�+DJXH��������&OHPHQV�*UDDIVPD���9DQ�'RRUQH�OHYHUGH�RPVWUHGHQ�PDWHULDDO���GH�9RONVNUDQW�����6HSWHPEHU�������5�6 ��9ULMVSUDDN�YRRU�9DQ�'RRUQHV�7UDQVPLVVLH���GH�9RONVNUDQW����6HSWHPEHU�������5 7 �4XRWHG�LQ�&ROLMQ�DQG�5XVPDQ��S�������5%8 �/HRQDUG�6��6SHFWRU���7KH�QHZ�QXFOHDU�QDWLRQV���9LQWDJH�%RRNV�5DQGRP�+RXVH��1HZ�<RUN���������S�����5 9 �*3'��+DUDOG�'RRUQERV����6WRUN�GHHG�RRN�QD�YHUPRHGHQ�YDQ�DWRRPVSLRQDJH�QRJ�]DNHQ�PHW�.KDQ���+DDUOHPV�'DJEODG����)HEUXDU\�������5�: �(�J��)RNNHU��QRZ�6WRUN�$HURVSDFH���+6$��QRZ�7KDOHV�1HGHUODQG���'DI�63��QRZ�63�$HURVSDFH��9HKLFOH�6\VWHPV���5%; �$V�WKH\�DUH�IRU�WKH�1$72�QXFOHDU�WDVN��E\�WKH�'XWFK�$LU�)RUFH�DW�9RONHO�$%�LQ�WKH�1HWKHUODQGV���

� ���

GHFLGHG� WKDW� DQ� DUPV� HPEDUJR� WR� 3DNLVWDQ� ZDV� QHHGHG�� LQ� UHVSRQVH� WR� LWV� SURJUHVV� WRZDUGV� D�QXFOHDU� ERPE���� $OVR� WKHLU� )���V� ZHUH� DOOHJHGO\� PRGLILHG� ZLWK� WKH� PHDQV� RI� FDUU\LQJ� DQG�GHOLYHULQJ�D�QXFOHDU�ZHDSRQ����2QO\�ZHHNV�EHIRUH�WKH�$PHULFDQ�HPEDUJR�WKH�'XWFK�JRYHUQPHQW�FODLPHG�WKDW��WKH�UHODWLRQ�EHWZHHQ�3DNLVWDQL�)����SODQHV�DQG�QXFOHDU�ZHDSRQV�LV�QRW�FRUUHFW�����7RGD\�3DNLVWDQL�DXWKRULWLHV�DUH�DJDLQ�LQ�WDONV�ZLWK�WKH�$PHULFDQV�WR�UHQHJRWLDWH�D�EDWFK�RI�)���V��QHZ� RU� VHFRQG�KDQG�� DQG� WR� UHIXUELVK� WKH� FXUUHQW� 3DNLVWDQL� )���V�� QRZ� WKH� 86� KDV� OLIWHG� LWV�VDQFWLRQV���� (YHQ� WKRXJK� LWV� PLVVLOH� SURJUDPPH� KDV� SURJUHVVHG� PXFK� RYHU� WKH� ODVW� \HDUV� DQG�GHSHQGHQF\�RQ�DLUFUDIW� DV�QXFOHDU�GHOLYHU\�V\VWHPV�KDV�GLPLQLVKHG��DGGLWLRQDO�)���V�FRXOG�VWLOO�SURYH�WR�EH�DQ�LPSRUWDQW�WRRO�LQ�3DNLVWDQ¶V�QXFOHDU�LQYHQWRU\���$�'XWFK�LQTXLU\�2QO\�DW�WKH�HQG�RI�0DUFK�������DIWHU�D�*HUPDQ�WHOHYLVLRQ�SURJUDPPH���UHYHDOHG�WKDW�3DNLVWDQ���WKURXJK�.KDQ���KDG�DFFHVV�WR�8UHQFR�8&�WHFKQRORJ\��GLG�WKH�'XWFK�ODXQFK�DQ�LQYHVWLJDWLRQ�LQWR�WKH�PDWWHU��%HFDXVH�QHZ�UHSRUWV� LQ�HDUO\�-XQH�RI� WKDW�\HDU� UHYHDOHG�WKDW�FHQWULIXJHV� LGHQWLFDO� WR�WKH� 'XWFK� RQHV� ZHUH� DOUHDG\� ZRUNLQJ� LQ� 3DNLVWDQ�� WKH� DXWKRULWLHV� �LQWHQVLILHG�� WKHLU�LQYHVWLJDWLRQ�����)URP�WKH�EHJLQQLQJ��WKH�'XWFK�DXWKRULWLHV�GRZQSOD\HG�TXHVWLRQV�DQG�DFFXVDWLRQV�ZLWK�UHJDUG�WR�WKH�YDOXH�RI�WKH�NQRZOHGJH�.KDQ�KDG�JDLQHG��DQG�FRQFHUQLQJ�WKH�PDQ\�IDLOXUHV�RQ�WKH�VHFXULW\�VLGH�� )LUVW� LW� ZDV� VDLG� WR� EH� DOO� UXPRXUV�� WKHQ� LW� ZDV� VDLG� WKDW� LI� DQ\� NQRZOHGJH� KDG� EHHQ�FRPSURPLVHG�� LW� ZRXOG� KDYH� EHHQ� �RQO\� DQ� LQVLJQLILFDQW� SDUW� RI� WKH� XOWUD�FHQWULIXJH�WHFKQRORJ\����� 6RPH� PRQWKV� ODWHU� LW� ZDV� DFNQRZOHGJHG� WKDW� �VHULRXV� GRXEWV� H[LVW� RQ� .KDQV�LQQRFHQFH����� )LQDOO\� LQ� WKH� ����� RIILFLDO� UHSRUW� µ2QGHU]RHN� ]DDN�.KDQ¶� WKH� JRYHUQPHQW�FRQFOXGHG� �WKDW� LW� LV� OLNHO\� WKDW� 3DNLVWDQ� WKURXJK� .KDQ� KDV� EHHQ� DEOH� WR� DFTXLUH� VHQVLWLYH�NQRZOHGJH�FRQFHUQLQJ� WKH� HQULFKPHQW� WHFKQRORJ\��EXW� WKDW� WKH� �UHDO� FRQWULEXWLRQ�RI�.KDQ� WR� D�3DNLVWDQL�8&�SURMHFW�UHJDUGLQJ�WKH�LQSXW�RI�NQRZOHGJH�LV�KDUG�WR�PHDVXUH������7KH�JHQHUDO�SLFWXUH�WKH�JRYHUQPHQW�WULHG�WR�XSKROG�WKURXJKRXW�ZDV�RQH�RI�D�UHJUHWWDEOH�DFFLGHQW��GXH�WR�OD[LW\�E\�D�FRXSOH�RI�SHRSOH��6RPH�H[WUD�VDIHJXDUGV�ZHUH�LQVWDOOHG�WR�SUHYHQW�D�UHFXUUHQFH�LQ� WKH� IXWXUH�� DQG� FDVHV� DJDLQVW� .KDQ� DQG� WZR� JXLOW\� FRPSDQLHV� ZHUH� SUHSDUHG���� 7KRXJK� WKH�JRYHUQPHQW� FDPH� XQGHU� ILUH� VHYHUDO� WLPHV� IRU� LWV� KDQGOLQJ� RI� WKH� FDVH�� WKHUH� ZHUH� QR� IXUWKHU�SROLWLFDO�FRQVHTXHQFHV����,W�ZDV�DQRWKHU�IRXU�\HDUV�EHIRUH�.KDQ�ZDV�ILQDOO\�WULHG�DQG�SURVHFXWHG��7KH�FDVH�DJDLQVW�KLP�ZDV�QRW�YHU\�VWURQJ��DOO�WKDW�FRXOG�EH�XVHG�DJDLQVW�.KDQ�ZHUH�WZR�OHWWHUV�IURP�KLP���ZULWWHQ�DIWHU�KLV������������������������������������������������������������6�< �,QWHOOLJHQFH�LQIRUPDWLRQ�UHDFKLQJ�86�DXWKRULWLHV�LQGLFDWHG�WKDW�3DNLVWDQ�ZDV�DFWLYHO\�ZRUNLQJ�RQ�D�QXFOHDU�ERPE��,W�VXSSRVHGO\�KDG�UHFHLYHG�D�GHVLJQ�IRU�D�ERPE�IURP�&KLQD��KDG�WHVWHG�D�QXFOHDU�WULJJHU��DQG�ZDV�DFWLYHO\�SURGXFLQJ�ZHDSRQV�JUDGH�XUDQLXP��6HH�KWWS���ZZZ�I��IDOFRQ�FRP�IDFWV�I��B���KWPO��6�3 �KWWS���ZZZ�I��IDOFRQ�FRP�IDFWV�I��B���KWPO�6%4 �4XRWHG�LQ�.R�&ROLMQ�DQG�3DXO�5XVPDQ���3DNLVWDDQVH�DWRRPERP�RQGHU�)���V�YDQ�)RNNHU"���9ULM�1HGHUODQG����-XQH�������6�5 �7KH�SRVVLELOLW\�RI�UHIXUELVKPHQW�ZDV�PHQWLRQHG�PRVW�UHFHQWO\�LQ�0DUFK������ZKHQ�3DNLVWDQ¶V�PDMRU�QRQ�1$72�DOO\��011$��VWDWXV�ZDV�DQQRXQFHG��*RSDO�5DWQDP�DQG�9LYHN�5DJKXYDQVKL��³6XEFRQWLQHQWDO�7LJKWURSH���8�6��1RG�7R�3DNLVWDQ�$QJHUV�,QGLD´��'HIHQVH�1HZV�����0DUFK�����������,Q�2FWREHU������%HOJLXP�ZDV�VDLG�WR�EH�D�SRVVLEOH�VRXUFH�RI�VXUSOXV�)���V�IRU�3DNLVWDQ��³3DNLVWDQ�PD\�JHW����KHOLFRSWHUV�IURP�WKH�86´��7KH�3UHVV�7UXVW�RI�,QGLD����2FWREHU�������6HH�DOVR��³3DNLVWDQ�WR�JHW������PLO��ZRUWK�RI�8�6��DUPDPHQWV��RIILFLDO´��-DSDQ�(FRQRPLF�1HZVZLUH�����6HSWHPEHU��������6%6 �=')�����0DUFK�������VHH���'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S����6 7 ��'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S����6�8 �(FRQRPLF�$IIDLUV�PLQLVWHU�9DQ�$DUGHQQH��DV�TXRWHG�LQ�9HHUPDQ�DQG�5RV��S������6 9 �9DQ�$DUGHQQH��:LHJHO��,QWHULRU�PLQLVWHU��DQG�9DQ�GHU�.ODXZ��)RUHLJQ�$IIDLUV���DV�TXRWHG�LQ�9HHUPDQ�DQG�5RV��S������6@: ��'H�]DDN�.KDQ���7ZHHGH�.DPHU��������������������QUV������S�������6�; �)RU�H[DPSOH������'XWFK�VXEFRQWUDFWRUV�RI�8&1�DUH�QRWLILHG����-XO\������RI�WKH�H[LVWLQJ�OHJLVODWLRQ��,ELG��S�����

� ���

UHWXUQ� WR� 3DNLVWDQ� �� WR� KLV� IRUPHU� FROOHDJXH�9HHUPDQ�� LQ�ZKLFK� KH� KDG� DVNHG� IRU� FODVVLILHG���LQIRUPDWLRQ� DERXW� µERWWRP�EHDULQJV¶� DQG� µSLYRWV¶�� FULWLFDO�8&�SDUWV�� )RU� WKH� LOOHJDO� FRS\LQJ� RI�VHFUHW� GRFXPHQWV� ZLWK� 8&�WHFKQRORJ\� DQG� UHOHYDQW� GHWDLOV� RI� LWV� VXSSOLHUV� KH� FRXOG� QRW� EH�SURVHFXWHG�� EHFDXVH� SURRI� ZDV� ODFNLQJ�� ,I� KH� KDG� EHHQ� FDXJKW� LW� FRXOG� RQO\� KDYH� EHHQ� IRU�HVSLRQDJH��QRW�IRU�LOOHJDOO\�H[SRUWLQJ�PDWHULDOV��$W�WKDW�WLPH�QR�H[SRUW�OLFHQFH�ZDV�QHHGHG�IRU�WKH�WUDQVIHU�RI�WHFKQRORJ\����$IWHU�DQ�LQLWLDO�VHQWHQFH���LQ�DEVHQWLD���RI���\HDUV�LPSULVRQPHQW��.KDQ�ZDV�DFTXLWWHG����0DUFK������E\�DQ�DSSHDOV�FRXUW�GXH�WR�D�WHFKQLFDOLW\��DV�WKH�VXPPRQV�KDG�QRW�EHHQ�GHOLYHUHG�SURSHUO\���7KRXJK�KH�ZDV�GHFODUHG�SHUVRQD�QRQ�JUDWD��.KDQ�FRQWLQXHG� WR�YLVLW� WKH�1HWKHUODQGV�IRU�\HDUV��ERWK�IRU�EXVLQHVV�DQG�IDPLO\�DIIDLUV��E\�ZD\�RI�WKH�%HOJLDQ�ERUGHU��ZKLFK�ZDV�TXLWH�SRURXV��+H�ZDV�RQO\�FDXJKW�RQFH�� LQ�'HFHPEHU�������ZKHQ�KH�ZDV�SXW�RQ�D�SODQH�EDFN�WR�3DNLVWDQ��2Q�DW�OHDVW�WKUHH�ODWHU�RFFDVLRQV�KH�ZDV�HYHQ�RIILFLDOO\�DOORZHG�WR�HQWHU�WKH�FRXQWU\��RQ��KXPDQLWDULDQ�JURXQGV������7HP�\HDUV� ODWHU�� DQG�ZLWKLQ�GD\V�RI�3DNLVWDQ� FURVVLQJ� WKH�QXFOHDU� WKUHVKROG� ����WK�0D\������ ��'XWFK�)RUHLJQ�PLQLVWHU�+DQV�YDQ�0LHUOR�DQQRXQFHG�DQ�HPEDUJR�RQ�DUPV�H[SRUWV�WR�WKH�FRXQWU\��DV� KH� KDG� DJDLQVW� ,QGLD� D� IHZ� GD\V� HDUOLHU� LQ� UHVSRQVH� WR� LWV� QXFOHDU� WHVWV��:KHQ�$�4��.KDQV�'XWFK�EDFNJURXQG�UH�HPHUJHG�LQ�WKH�PHGLD��8UHQFR�VSRNHVPDQ�:LOOHP�YDQ�GHU�(OVW�FODLPHG�WKDW��PDQ\�RI�WKRVH�VWRULHV�ZHUH�YHU\��YHU\�H[DJJHUDWHG��$V�IDU�DV�ZH�NQRZ�KH�KDV�QHYHU�EHHQ�DEOH�WR�JHW�KROG�RI�DQ\�LQIRUPDWLRQ�����7KDW�FODLP�EHFDPH�PRUH�OXGLFURXV�HYHU\�GD\����7KH� 'XWFK� DXWKRULWLHV� WKHPVHOYHV� KDYH� QRZ� DGPLWWHG� WKDW� 8UHQFR� WHFKQRORJ\� DSSDUHQWO\� KDV�PDGH� LWV� ZD\� YLD� 3DNLVWDQ� WR� FRXQWULHV� WKDW� VRPH� JRYHUQPHQWV� KDYH� ODEHOOHG� FRXQWULHV� RI�FRQFHUQ��RU�HYHQ�SDUW�RI�DQ�D[LV�RI�HYLO����,Q�D�ZULWWHQ�VWDWHPHQW���WKDW�ZDV�PHQWLRQHG�LQ�UHODWLRQ�WR�.KDQ¶V� SXEOLF� FRQIHVVLRQ� RI� KDYLQJ� OHDNHG� QXFOHDU� WHFKQRORJ\� RQ� �� )HEUXDU\� ����� ��.KDQ�KLPVHOI�LV�VDLG�WR�KDYH�FRQIHVVHG�WR�VHOOLQJ�QXFOHDU�WHFKQRORJ\�WR�,UDQ��/LE\D�DQG�1RUWK�.RUHD�����:KDW�UROH�IRU�WKH�3DNLVWDQL�JRYHUQPHQW"�2QH� RI� WKH�PRVW� LPSODXVLEOH� DVSHFWV� RI� WKH�.KDQ� VWRU\� DU� WKH� FODLPV� WKDW�.KDQ�ZDV� OHDGLQJ� D�PXOWL�PLOOLRQ� GROODU� QXFOHDU� WUDGLQJ� EXVLQHVV� RQ� KLV� RZQ����*LYHQ� KLV� KLJK� SRVLWLRQ�ZLWKLQ� WKH�3DNLVWDQL�HVWDEOLVKPHQW�DQG�KLV�FORVH�FRQWDFWV�ZLWK�SUHVLGHQWV�DQG�SULPH�PLQLVWHUV�VLQFH�WKH�PLG�VHYHQWLHV�� LW� LV� KLJKO\� XQOLNHO\� WKDW� WKH\� GLG� QRW� NQRZ� DERXW� KLV� DFWLYLWLHV��0RUHRYHU�� DV�PRVW�VWRULHV� RQ� WKH� 1RUWK� .RUHDQ�3DNLVWDQL� QXFOHDU� UHODWLRQV� FRQILUP�� WKH� EDUWHU� WUDGH� RI� PLVVLOH�WHFKQRORJ\� IRU� XUDQLXP� HQULFKPHQW� WHFKQRORJ\� GLUHFWO\� EHQHILWHG� 3DNLVWDQV� QXFOHDU� PLVVLOH�

�����������������������������������������������������������7 < �$FFRUGLQJ�WR�IRUPHU�ODZ\HU�)UDQN�%DNNHU��.KDQ�ZRXOG�KDYH�ZDONHG�IUHH�DQ\ZD\��DV�KLV�ODZ\HU��WKH�ODWH�0DULR�GHQ�'ULMYHU��KDG�VXFFHVIXOO\�SURYHQ�WKDW�DW�OHDVW�IRU�WKH�SLYRW��EOXHSULQWV�ZHUH�SXEOLFO\�DYDLODEOH��(G�&URRQHQEHUJ���1XFOHDLU�JLGVODQG���+3�'H�7LMG�����)HEUXDU\��������7 3 �$�GLUHFW�FRQVHTXHQFH�RI�.KDQV�FDVH�LV�WKH�FUHDWLRQ�RI�DQ�DGGLWLRQDO�FDWHJRU\�IRU�WKH�WUDQVIHU�RI�WHFKQRORJ\�IRU�ZKLFK�D�OLFHQFH�LV�QHHGHG��([FOXGHG�WKRXJK�LV�WHFKQRORJ\�WKDW�LV�DOUHDG\�DYDLODEOH�LQ�RSHQ�VRXUFHV���7 4 �7KH�PRWKHU�RI�.KDQ¶V�ZLIH�UH�PDUULHG�D�IRUPHU�WUDQVSRUW�ZRUNHU��ZKR�.KDQ�ZDV�DOORZHG�WR�YLVLW�RQ�KXPDQLWDULDQ�JURXQGV��EHFDXVH�RI�KLV�FULWLFDO�FRQGLWLRQ��³$WRRPVSLRQ�.KDQ�NUHHJ�WRHVWHPPLQJ�YRRU�]LHNHQEH]RHN´��GH�9RONVNUDQW�����-XO\�������+DQV�YDQ�=RQ��³'U��$EGXO�4DGHHU�.KDQ�KHHIW�QHUJHQV�VSLMW�YDQ´��$OJHPHHQ�'DJEODG�����-XQH�������7 5 ��5RO�VSLRQ�RYHUGUHYHQ���7URXZ�����0D\�������7 6 �³%HDQWZRRUGLQJ�NDPHUYUDJHQ�YDQ�KHW�OLG�:LOGHUV��99'��RYHU�KHW�RQWZHUS�YDQ�GH�XOWUDFHQWULIXJHV�LQ�,UDQ´�����-DQXDU\������DQG��.DPHUEULHI�LQ]DNH�ELM�GH�UHJHULQJ�DDQZH]LJH�NHQQLV�RYHU�GH�EHWURNNHQKHLG�YDQ�8UHQFR�1HGHUODQG�%9�ELM�GH�RQWZLNNHOLQJ�YDQ�QXFOHDLUH�ZDSHQV�LQ�HHQ�DDQWDO�ODQGHQ�ZDDURQGHU�3DNLVWDQ�����$SULO�������ERWK�DW�ZZZ�PLQEX]D�QO��7%7 �6HH�H�J���³3DNLVWDQL�QXFOHDU�KHUR�DGPLWV�VHOOLQJ�VHFUHWV´��$3����)HEUXDU\�������7 8 �$FFRUGLQJ�WR�WKH�%XVK�DGPLQLVWUDWLRQ�.KDQV�EXVLQHVV�ZLWK�/LE\D�DORQH�QHWWHG������PLOOLRQ��'DYLG�(��6DQJHU�DQG�:LOOLDP�-��%URDG���3DNLVWDQLV�1XFOHDU�(DUQLQJV�������0LOOLRQ���7KH�1HZ�<RUN�7LPHV�����0DUFK��������

� ���

SURJUDPPH����7KDW�.KDQ�KDG�VHW�XS�VXFK�GHDOV�ZLWKRXW�SHUPLVVLRQ�IURP�WKH�DXWKRULWLHV�LV�VLPSO\�EH\RQG� LPDJLQDWLRQ��0RVW� DQDO\VWV� WKHUHIRUH� DJUHH� WKDW�.KDQ¶V� FRQIHVVLRQ� DQG� WKH� VXEVHTXHQW�SDUGRQ� ZDV� GLUHFWO\� OLQNHG� WR� WKH� NQRZOHGJH� WKDW� VWDUWLQJ� D� FRXUW� FDVH� ZRXOG� QRW� RQO\�DXWRPDWLFDOO\�FUHDWH�D�SHUIHFW� FDVH� IRU�D�FRXS��EXW�DOVR�FHUWDLQO\� LPSOLFDWH�SUHVLGHQW�0XVKDUUDI�DQG�PDQ\�RWKHUV��:LWK�WRS�$O�4DHGD�OHDGHUV�VXSSRVHGO\�KLGLQJ�LQ�WKH�UHPRWH�ERUGHU�UHJLRQ�ZLWK�$IJKDQLVWDQ�� DQG� 3DNLVWDQ¶V� ZLOOLQJQHVV� WR� DVVLVW� WKH� 86�PLOLWDU\� LQ� WKHLU� KXQW� MXVW� DFURVV� WKH�ERUGHU��3DNLVWDQ�LV�WRR�LPSRUWDQW�LQ�WKH�ZDU�DJDLQVW�WHUURULVP�WR�VDFULILFH��,Q�IDFW�LW�LV�VR�LPSRUWDQW�WKDW�GHVSLWH� WKH�DOOHJDWLRQV�RQ�3DNLVWDQ¶V� UROH� LQ�SUROLIHUDWLQJ�QXFOHDU� WHFKQRORJ\��RQ����0DUFK������� ZKHQ� 86� 6HFUHWDU\� RI� 6WDWH� &ROOLQ� 3RZHOO� YLVLWHG� 0XVKDUUDI�� LW� ZDV� DQQRXQFHG� WKDW�3DNLVWDQ�ZRXOG� JHW� WKH� VWDWXV� RI� ³PDMRU� QRQ�1$72� DOO\´����$V� LQ� WKH� SDVW�� VKRUW�WHUP� IRUHLJQ�SROLF\�DLPV�HIIHFWLYHO\�XQGHUPLQHG�DWWHPSWV�WR�VWRS�WKH�SUROLIHUDWLRQ�RI�QXFOHDU�WHFKQRORJ\����,I�UHFHQW�UXPRXUV�SURYH�WR�EH�WUXH��WKH�FDVH�PD\�FRPH�IXOO�FLUFOH��WDNLQJ�D�EL]DUUH�VWHS�EDFN�WR�WKH�1HWKHUODQGV��$FFRUGLQJ� WR� WKH�%ULWLVK� SDSHU�7KH�'DLO\�7HOHJUDSK�� LQ� ������$4�.KDQ� VHQW� KLV�GDXJKWHU� 'LQD� DEURDG� ZLWK� �SRWHQWLDOO\� LQFULPLQDWLQJ� GRFXPHQWV�� DQG� D� WDSH�UHFRUGHG�VWDWHPHQW����.KDQ�LV�VDLG�WR�FODLP�WKDW�DOO�WKH�FKLHIV�RI�DUP\�VWDII�VLQFH�������LQFOXGLQJ�JHQHUDO�0XVKDUUDI��NQHZ�RI�KLV�DFWLRQV��.KDQV�SDUGRQ�LV�VDLG�WR�EH�GLUHFWO\�OLQNHG�WR�KLV�SRVVHVVLRQ�RI�WKHVH�GRFXPHQWV��=LDXGGLQ�6DUGDU�ZULWHV� LQ� WKH�1HZ�6WDWHVPDQ� WKDW�KH�NQRZV�ZKHUH� WKH\�DUH��.KDQ�VHQW�KLV�GDXJKWHU�WR�WKH�1HWKHUODQGV�LQ�'HFHPEHU�������ZLWK��WUXFNORDGV�RI�LQFULPLQDWLQJ�GRFXPHQWV�����+H�VD\V�WKDW�FRQILGHQWLDO�FRQWDFWV�ZLWK�SHRSOH�ZLWKLQ�WKH�3DNLVWDQL�PLOLWDU\�DUH�KLV�VRXUFH����,I�WUXH��.KDQ�KDV�JLYHQ�WKH�'XWFK�JRYHUQPHQW�DQRWKHU�PDMRU�KHDGDFKH����2IILFLDO�VLOHQFH�DJDLQ�7KH�UHFHQW�TXHVWLRQV�RQ�.KDQ�DQG�8UHQFR�KDYH�FDXVHG�VHULRXV�XQHDVH�LQ�7KH�+DJXH��%XW�UDWKHU�WKDQ�UHYHDOLQJ� WKH�DQVZHUV� LQ�SXEOLF�� WKH�JRYHUQPHQW�DSSHDUV� WR�EH� WU\LQJ� WR�PDLQWDLQ�DV�PXFK�VHFUHF\�DERXW�WKH�FDVH�DV�SRVVLEOH��)RU�DV�ORQJ�DV�QR�FRXUW�FDVH�WDNHV�SODFH�LW�LV�RQO\�LQYHVWLJDWLYH�MRXUQDOLVP� WKDW� SURYLGHV� QHZ� LQVLJKWV��0RVW� GLVDSSRLQWLQJ� LQ� WKLV� UHVSHFW� LV� WKH� ORQJ�H[SHFWHG�OHWWHU�IURP�WKH�JRYHUQPHQW�RQ�WKH�UHFHQW�8UHQFR�UHYHODWLRQV��$QQRXQFHG�LQ�-DQXDU\�������LW�ZDV�ILQDOO\�VHQW�WR�SDUOLDPHQW�LQ�HDUO\�$SULO��7KH�RQH�SDJH�OHWWHU��RQ�WKH�DYDLODEOH�NQRZOHGJH�ZLWK�WKH�JRYHUQPHQW� RQ� WKH� LQYROYHPHQW� RI� 8UHQFR� 1HGHUODQG� %9� ZLWK� WKH� GHYHORSPHQW� RI� QXFOHDU�ZHDSRQV� LQ� D� QXPEHU� RI� FRXQWULHV�� DPRQJ� ZKLFK� 3DNLVWDQ��� JRHV� QR� IXUWKHU� WKDQ� VWDWLQJ� WKDW�8UHQFR�LWVHOI�KDV�QHYHU�EHHQ�LQYROYHG�DV�VXFK�LQ� WKH�GHYHORSPHQW�RI�QXFOHDU�ZHDSRQV�E\�WKHVH�FRXQWULHV�� 7KDW� .KDQ� VWROH� LQIRUPDWLRQ� RQ� WKH� �HDUOLHVW� 8UHQFR�WHFKQRORJ\�� LV� QHYHUWKHOHVV�UHJUHWWHG��7KHQ�WKH�OHWWHU�FRQFOXGHV�WKDW����\HDUV�ODWHU�WKHUH�LV�QRWKLQJ�WR�DGG�WR�WKH�.KDQ�UHSRUW��FRQFHUQLQJ�WKH�.KDQ�DIIDLU�DQG�8UHQFR��7KH�ILQGLQJ�RI��FHQWULIXJHV�RI�WKH�ROG�8UHQFR�GHVLJQ��LQ�/LE\D� DQG� ,UDQ� RQO\� UHLQIRUFHV� WKH� �VHULRXV� VXVSLFLRQ�� WKDW� $�4�� .KDQ� KDV� VWROHQ� WKHVH�EOXHSULQWV����,Q�WKDW�UHVSHFW��WRR��QRW�PXFK�KDV�FKDQJHG�VLQFH�WKH������UHSRUW��'H�]DDN�.KDQ�����������������������������������������������������������������7�9 �$����PHPEHU�1RUWK�.RUHDQ�GHOHJDWLRQ�ZDV�HYHQ�SUHVHQW�DW�3DNLVWDQV�QXFOHDU�WHVWV��6HH�IRU�H[DPSOH��3DXO�:DWVRQ�DQG�0XEDVKLU�=DLGL���'HDWK�RI�1��.RUHDQ�:RPDQ�2IIHUV�&OXHV�WR�3DNLVWDQL�1XFOHDU�'HDOV���/RV�$QJHOHV�7LPHV����0DUFK�������7 : �³86�7R�'HVLJQDWH�3DNLVWDQ�$�0DMRU�1RQ�1$72�$OO\´��$)3�����0DUFK�������DW�ZZZ�VSDFHGDLO\�FRP��7 ; �0DVVRXG�$QVDUL�DQG�9LFWRULD�6FKRILHOG���)DWKHU�RI�WKH�,VODPLF�ERPE�EDUWHUV�SDSHUV�IRU�KLV�IXWXUH���7HOHJUDSK��,QWHUQHW�HGLWLRQ�����)HEUXDU\�������8%< �=LDXGGLQ�6DUGDU����7UDLWRU��ZLOO�JHW�D�ULFK�UHWLUHPHQW���1HZ�6WDWHVPDQ����)HEUXDU\�������8&3 �$DUW�%URXZHU���:DDU�]LMQ�GH�.KDQ�SDSHUV"���*URHQH�$PVWHUGDPPHU�����)HEUXDU\�������8�4 ��.DPHUEULHI�LQ]DNH�ELM�GH�UHJHULQJ�DDQZH]LJH�NHQQLV�RYHU�GH�EHWURNNHQKHLG�YDQ�8UHQFR�1HGHUODQG�%9�ELM�GH�RQWZLNNHOLQJ�YDQ�QXFOHDLUH�ZDSHQV�LQ�HHQ�DDQWDO�ODQGHQ�ZDDURQGHU�3DNLVWDQ�����$SULO�������DW�ZZZ�PLQEX]D�QO��

� ���

&+$37(5�,,��.+$1¶6�6833257�1(7:25.��.KDQ� EHIULHQGHG� VHYHUDO� WRS� 'XWFK� VFLHQWLVWV� GXULQJ� KLV� WLPH� LQ� WKH� 1HKHUODQGV� DV� ZHOO� DV�FROOHDJXHV� DQG� IRUPHU� FR�VWXGHQWV�� ZKR� ODWHU� YLVLWHG� HLWKHU� .KDQ� RU� KLV� QXFOHDU� FRQQHFWLRQV��7KRXJK�.KDQ¶V� FKDUPLQJ�� IULHQGO\� SHUVRQDOLW\� LV� RIWHQ� TXRWHG� DV� D� UHDVRQ�ZK\� KH� FRXOG� ZLQ�SHRSOH�WR�ZRUN�ZLWK�KLP��KH�REYLRXVO\�KDG�PRUH�WR�RIIHU��LQFOXGLQJ�IUHH�WULSV�WR�3DNLVWDQ��SDLG�IRU�E\�WKH�3DNLVWDQL�JRYHUQPHQW��2QH�RI�WKHVH�FROOHDJXHV��+HQN�6OHERV��PD\�ZHOO�KDYH�HDUQHG�PRVW�RI�KLV�LQFRPH�RYHU�WKH�ODVW�GHFDGHV�ZLWK�EXVLQHVV�GHDOV�IURP�.KDQ���$�PRUDO�GXW\��,Q� WKH� ILUVW� \HDUV� DIWHU� .KDQV� GHSDUWXUH� IRU� 3DNLVWDQ� LQ� ����� DW� OHDVW� WKUHH� SURPLQHQW� 'XWFK�VFLHQWLVWV�DUH�VDLG�WR�KDYH�YLVLWHG�3DNLVWDQ��%UDEHUV��%XUJHUV�DQG�%DUHQGUHJW����7KH�RQO\�RQH�ZKR�KDV�QHYHU�GHQLHG�WKLV�LV�%UDEHUV��.KDQ¶V�SURIHVVRU�LQ�/HXYHQ��+H�LV�TXRWHG�DV�KDYLQJ�VDLG�WKDW�LW�ZDV� KLV� �PRUDO� GXW\�� WR� KHOS� IRUPHU� VWXGHQWV�ZKHQHYHU� DVNHG�� EXW� KDV� DOVR� VDLG�� �,� GRQW� KHOS�WKHP�WR�PDNH�DQ�DWRPLF�ERPE�����%UDEHUV�DGPLWV�WR�KDYLQJ�EHHQ�LQ�,VODPDEDG��VHYHUDO�WLPHV��LQ�WKH� \HDUV� ����������� ,Q� WKRVH� \HDUV� KH� DOVR� PHW� 0XQLU� $KPDG� .KDQ�� WKHQ� FKDLUPDQ� RI� WKH�3DNLVWDQ� $WRPLF� (QHUJ\� &RPPLVVLRQ� �3$(&�� DQG� WKH� FRXQWU\V� UHSUHVHQWDWLYH� DW� WKH� ,$($��0XQLU�.KDQ�ZDV�$4�.KDQV�ERVV�IRU�D�VKRUW�ZKLOH�LQ�������XQWLO� $4�IRXQGHG�WKH�(QJLQHHULQJ�5HVHDUFK�/DERUDWRULHV��(5/��ODWHU�.5/�����$FFRUGLQJ�WR�%UDEHUV�KH�QHYHU�ZDQWHG�PRQH\��EXW�KH�GLG�JHW�WLFNHWV�IRU�IUHH�RU�KDOI�SULFH��DV�D�JXHVW�RI�WKH�3DNLVWDQL�JRYHUQPHQW�����$IWHU�3UHVLGHQW�%KXWWR�RSHQO\�VWDUWHG�WKH�TXHVW�IRU�3DNLVWDQV�QXFOHDU�ERPE�LQ�������UHVWULFWLRQV�ZHUH�SODFHG�RQ�3DNLVWDQL� VWXGHQWV� DW�'XWFK�XQLYHUVLWLHV� DQG� ODERUDWRULHV��&RQFHUQV� DERXW� WKHVH�GHYHORSPHQWV�ZHUH� QRW� VKDUHG� E\� HYHU\ERG\��$V�%UDEHUV� FRPPHQWHG� LQ� ������ �>3@HUVRQDOO\� ,�GRQW�UHDOO\�FDUH��.QRZOHGJH�LV�QRW�VHFUHW�DQG�8&�WHFKQRORJ\�LV�QRWKLQJ�H[RWLF��<RX�FDQ�ILQG�LW�DOO�EDFN�LQ�WKH�SURIHVVLRQDO�OLWHUDWXUH������,Q� WKH� HDUO\� QLQHWLHV� %UDEHUV� ZDV� UHFWRU� RI� WKH� *XODP� ,VKDT� .KDQ� ,QVWLWXWH� RI� (QJLQHHULQJ��6FLHQFH�DQG�7HFKQRORJ\��VHW�XS�E\�$4�.KDQ�LQ�7RSL��1RUWK�:HVW�)URQWLHU�3URYLQFH��7KH�LQVWLWXWH�ZDV�RQ�D�-XQH������86�JRYHUQPHQW�OLVW�RI�3DNLVWDQL�HQWLWLHV�ZKLFK�ZHUH�VDLG�WR�EH�LQYROYHG�LQ�QXFOHDU� RU� PLVVLOH� DFWLYLWLHV� DQG� WKHUHIRUH� GHQLHG� 86� LWHPV� FRQWUROOHG� IRU� QRQ�SUROLIHUDWLRQ�UHDVRQV��$QG�DV�UHFHQWO\�DV�ODVW�\HDU�KH�ZDV�D�PHPEHU�RI�WKH�LQWHUQDWLRQDO�VFLHQWLILF�FRPPLWWHH�RI�WKH� �WK� ,QWHUQDWLRQDO� 6\PSRVLXP� RQ� $GYDQFHG� 0DWHULDOV� �,6$0��� KHOG� LQ� 6HSWHPEHU� ����� LQ�,VODPDEDG�� ,6$0� LV� WKH� PRVW� LPSRUWDQW� LQWHUQDWLRQDO� PHHWLQJ� RI� .KDQ� 5HVHDUFK� /DERUDWRULHV��.5/���VHH�EHORZ����%HIRUH� ZRUNLQJ� DW� /HXYHQ� 8QLYHUVLW\�� %UDEHUV� KDG� ZRUNHG� DW� WKH� DWRPLF� UHVHDUFK� FHQWUH� LQ�VRXWKHUQ� 1RUZD\� ZKHUH� 'XWFK� DQG� 1RUZHJLDQ� VFLHQWLVWV� ZRUNHG� WRJHWKHU�� %UDEHUV� ERVV� LQ�1RUZD\�ZDV�DQRWKHU�UHVSHFWHG�VFLHQWLVW��WKH�PDWKHPDWLFLDQ�DQG�SK\VLFLVW�GU��7��%DUHQGUHJW��)URP������%UDEHUV�DQG�%DUHQGUHJW�DOVR�ZRUNHG�WRJHWKHU�LQ�0RO��%HOJLXP��ZKHUH�%DUHQGUHJW�EHFDPH�GLUHFWRU�RI�(XURFKHPLH�� WKH� WKHQ�(XURSHDQ�SURMHFW� WR� UHSURFHVV� VSHQW�QXFOHDU� IXHO�� ,Q� WKH� HDUO\���V�%UDEHUV�ZRUNHG�RQH�GD\�D�ZHHN�DW�WKH�QXFOHDU�HQHUJ\�ODERUDWRU\�6&.��DOVR�LQ�0RO����������������������������������������������������������������8%5 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������8�6 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������8 7 �KWWS���QXFOHDUZHDSRQDUFKLYH�RUJ�3DNLVWDQ�$4.KDQ�KWPO�8%8 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������8 9 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������8�: �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������

� ���

�%DUHQGUHJW� ZDV� GLUHFWRU� RI� WKH� 'XWFK� HQJLQHHULQJ� FRPSDQ\� &RPSULPR� EHWZHHQ� ����� DQG� ��2FWREHU� �������� &RPSULPR� DQG� ,QWHUDWRP�� VXEVLGLDU\� RI� WKH� *HUPDQ� 6LHPHQV� FRQFHUQ� ZHUH�WRJHWKHU�UHVSRQVLEOH�IRU�WKH�GHVLJQ�DQG�VXSHUYLVLRQ�RI�WKH�ILUVW�WZR�XUDQLXP�HQULFKPHQW�IDFWRULHV�LQ�$OPHOR����%DUHQGUHJWV�VRQ�FRQILUPHG�WR�MRXUQDOLVWV�LQ������WKDW�KLV�IDWKHU�KDG�EHHQ�WR�3DNLVWDQ��VHYHUDO� WLPHV�� LQ� WKH� SHULRG� ������������� +LV� IDWKHU� GHQLHG� WKLV� WR� WKH� VDPH� MRXUQDOLVWV�� EXW�DGPLWV� WR� KDYLQJ� EHHQ� LQ� 3DNLVWDQ� LQ� ������ WR� ZRUN� RQ� D� GHDO� IRU� D� IHUWLOL]HU� SODQW� GHVSLWH�D�&RPSULPR�VSRNHVSHUVRQ�VWDWLQJ�WKDW�WKH�FRPSDQ\�KDG�QRW�GRQH�DQ\�IHUWLOLVHU�UHODWHG�ZRUN�IRU����\HDUV��%DUHQGUHJW�DOVR�GHQLHG� WKDW�KH�KDG�HYHU�PHW�$�4��.KDQ��EXW�%UDEHUV�FODLPHG� WKDW�KH�PHW� 0XQLU� $KPDG� .KDQ� LQ�ODWH� ����� WR� JHW� RUGHUV� IRU� &RPSULPR�� $IWHU� UHWLULQJ� LQ� �����%DUHQGUHJW�EHFDPH�DGYLVRU�RI�1XFOHEUDV�LQ�%UD]LO����7KH� WKLUG� VFLHQWLVW�� SURIHVVRU� %XUJHUV�� IURP� 'HOIW�� KDV� DOZD\V� GHQLHG� KDYLQJ� HYHU� EHHQ� LQ�3DNLVWDQ��OHW�DORQH�KDYLQJ�YLVLWHG�.KDQ�WKHUH��1HYHUWKHOHVV��ERWK�SURIHVVRU�%UDEHUV�DQG�D�'XWFK�IULHQG�RI�0UV�.KDQ�FODLP�WKDW�KH�ZDV�WKHUH�WKHUH�IRU�VL[�ZHHNV�LQ�HDUO\���������$FFRUGLQJ�WR�WKLV�9RONVNUDQW�DUWLFOH��0UV�.KDQ¶V�IULHQG�KDV�D�OHWWHU�IURP�KHU��LQ�ZKLFK�VKH�FRPSODLQV�RI�KDYLQJ�WR�WDNH�FDUH�RI�WKH�LQYDOLG�%XUJHUV��,Q�WKH�VDPH�DUWLFOH�%XUJHUV�ZLIH�VD\V�WKDW�WKLV�OHWWHU�PXVW�EH�D�IDOVLILFDWLRQ���0DQ\� \HDUV� ODWHU�� WKH�'XWFK� VHHP� WR� KDYH� EHFRPH�PRUH� VHQVLWLYH� WR� IRUHLJQHUV�ZRUNLQJ� DW� RU�YLVLWLQJ� VFLHQWLILF� LQVWLWXWLRQV� DQG� UHODWHG� FRPSDQLHV�� ,Q� WKH� VXPPHU� RI� ������ WKH� VHFXULW\� DQG�LQWHOOLJHQFH�VHUYLFH�$,9'�UHOHDVHG�D�UHSRUW�LQ�ZKLFK�LW�ZDUQHG�RI�SRVVLEOH�LQILOWUDWLRQ�E\�SHRSOH�IURP��FRXQWULHV�RI�FRQFHUQ���PRVW�QRWDEO\�,UDQ��/LE\D��6\ULD��1RUWK�.RUHD��3DNLVWDQ�DQG�,QGLD������2SHUDWLRQ�EXWWHU�IDFWRU\�7KH�QDPH�RI�+HQN�6OHERV�KDV�EHHQ�PHQWLRQHG�PDQ\�WLPHV�GXULQJ�WKH�ODVW�PRQWKV�LQ�SUHVV�UHSRUWV�RQ�.KDQV�QXFOHDU�QHWZRUN��+LV�QDPH�VXUIDFHG�VKRUWO\�DIWHU�D�3DNLVWDQL�JRYHUQPHQW�VSRNHVPDQ�VWDWHG� DW� D� SUHVV� FRQIHUHQFH�� WKDW� D� 'XWFK� EXVLQHVVPDQ� FDOOHG� �+DQN�� RU� �+DQN� 6��� ZDV�LQYROYHG�������+HQN�6OHERV�KDV�NQRZQ�$4�.KDQ�IRU�PRUH�WKDQ�IRUW\�\HDUV��VLQFH�WKH\�ERWK�VWXGLHG�PHWDOOXUJ\�LQ� 'HOIW� LQ� ������ $IWHU� KLV� VWXGLHV� 6OHERV� ZRUNHG� IRU� ILYH� \HDUV� IRU� WKH� 5R\DO� 1DY\�� DV�WURXEOHVKRRWHU�LQYROYHG�LQ�EX\LQJ�FRPSRQHQWV�IRU�VXEPDULQHV��7KURXJK�KLV�MRE�KH�ZDV�LQ�WRXFK�ZLWK� WKH� VSHFLDOLVHG� ZHOGLQJ� ILUP� ([SORVLYH� 0HWDO� :RUNV� +ROODQG� �(0:+�� �� D� 8UHQFR�VXEFRQWUDFWRU���ZKHUH�KH�EHFDPH�&RPPHUFLDO�'LUHFWRU�DURXQG��������,Q������6OHERV�IOHZ�WR�3DNLVWDQ�IRU�WKH�ILUVW�WLPH��7KH�'XWFK�GDLO\�15&�TXRWHV�KLP�DV�VD\LQJ�RQ�WDSH�� �,� GHOLYHUHG� KLP� ������ WKH�ZKROH� ORW�� WKH�ZKROH� UDQJH� IURP� HOHFWURQLFV� WR� WKH� FRQVWUXFWLRQ�PDWHULDOV��DOO�NLQGV�RI�WKLQJV�WKDW�ZHUH�QRW�IRUELGGHQ�WR�GHDO�LQ�����$QG�DFFRUGLQJ�WR�WKH�FRXUW�WKDW�

�����������������������������������������������������������8%; �7KHQ�D�MRLQW�FRPSDQ\�RI�569��WKH�WKHQ�VKLS\DUG�FRQJORPHUDWH��ZKLFK�ZHQW�EDQNUXSW�D�FRXSOH�RI�\HDUV�ODWHU���90)��6WRUN���6KHOO�DQG�6+9��D�IRUPHU�FRDO�FRPSDQ\�RZQHG�E\�RQH�RI�WKH�ULFKHVW�'XWFK�IDPLOLHV���GH�)HQWHQHU�YDQ�9OLVVLQJHQ���9 < �$QG�SUREDEO\�WKH�WKLUG��VHH���&RPSULPR�ZHUNW�DDQ�8&1�SURMHFW���GH�9RONVNUDQW�����-XQH�������9 3 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������9 4 �3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������9 5 ��3UROLIHUDWLH�YDQ�PDVVDYHUQLHWLJLQJVZDSHQV���5LVLFRV�YRRU�EHGULMYHQ�HQ�ZHWHQVFKDSSHOLMNH�LQVWHOOLQJHQ���$,9'��-XO\�������9 6 �'DYLG�5RKGH�DQG�'DYLG�(��6DQJHU���.H\�3DNLVWDQL�,V�6DLG�7R�$GPLW�$WRP�7UDQVIHUV���1HZ�<RUN�7LPHV����)HEUXDU\��������9�7 �$OEHUW�DQG�.QLS��15&�+DQGHOVEODG�����)HEUXDU\�������

� ���

VHQWHQFHG�KLP�LQ�������KH�DGPLWWHG�WR�'XWFK�H[SRUW�FRQWURO�DXWKRULWLHV�WKDW�KH�ZDV�ZHOO�DZDUH�RI�WKH�QXFOHDU�GHVWLQDWLRQ�RI�KLV�H[SRUW�DFWLYLWLHV���VHH�DOVR�EHORZ�������6OHERV���ZKR�VWDUWHG�KLV�RZQ�EXVLQHVV�6OHERV�5HVHDUFK�%9�LQ�������� LV�PHQWLRQHG� LQ�GLIIHUHQW�FDVHV� IURP� WKH� ODWH�����V�RQZDUGV�� WKRXJK�VRPH�FODLPV�DUH�KDUG� WR�YHULI\��+H� LV� VDLG� WR�KDYH�EHHQ�LQYROYHG�LQ�WKH�9'7��3DNLVWDQ�3LSHOLQH��GHDO�DV�D�PLGGOHPDQ����$QG�DFFRUGLQJ�WR�*HUPDQ�EURDGFDVWLQJ�FRUSRUDWLRQ�=')��6OHERV�PHW�WKH�KHDG�RI�WKH�6SHFLDO�:RUNV�2UJDQLVDWLRQ��$PLG�$OL�6DLG��LQ�WKH�1HWKHUODQGV�LQ����������%\� DFFLGHQW���� 6OHERV�ZDV� FDXJKW� LOOHJDOO\� H[SRUWLQJ� D�86�PDGH�7HNWURQL[� RVFLOORVFRSH� RQ� ���2FWREHU������DQG�ZDV�VHQWHQFHG�WR�RQH�\HDU�LPSULVRQPHQW�LQ�-XO\�������'XULQJ�WKH�WULDO�LW�WXUQHG�RXW�WKDW�6OHERV�KDG�EHHQ�ZDUQHG�E\�WKH�'XWFK�JRYHUQPHQW�H[SRUW�FRQWURO�GHSDUWPHQW��(&'��LQ�������IRU�WKUHH�VXVSLFLRXV�WUDQVDFWLRQV����)RU�XQNQRZQ�UHDVRQV�KH�QHYHU�VHUYHG�KLV�SULVRQ�WHUP����$FFRUGLQJ� WR� DQRWKHU�*HUPDQ� EURDGFDVWHU�� LQ� ����� DQG� ����� 6OHERV� UHFHLYHG� DURXQG� ��������(XURV�IURP�WKH�3DNLVWDQL�HPEDVV\�LQ�%RQQ�LQ�KLV�*HUPDQ�&RPPHU]EDQN�DFFRXQW��,Q�WKDW�VDPH�79�SURJUDPPH�KH�ZDV�VDLG�WR�EH�LQYROYHG�LQ�D�GHDO�IRU�.KDQ�ZLWK�*HUPDQ�VWHHO�FRPSDQ\�$UEHG�6DDUVWDDO��,QWHUYLHZHG�E\�WKH�*HUPDQV��6OHERV�H[SODLQHG�WKDW�ILQDQFLDO�SUREOHPV�ZHUH�WKH�UHDVRQ�IRU�KLV�DFWLYLWLHV��+H�LV�TXRWHG�DV�KDYLQJ�FRGHQDPHG�KLV�EXVLQHVV�ZLWK�3DNLVWDQ��2SHUDWLRQ�%XWWHU�IDFWRU\������2Q� ��� 'HFHPEHU� ����� .KDQ� ZDV� FDXJKW� LQ� D� FDU�� QHDU� KLV� ZLIHV� IDPLO\� KRPH� LQ� %HUJHQ� RS�=RRP��DSSDUHQWO\�DV�D�UHVXOW�RI�VHFXULW\�VHUYLFH�PRQLWRULQJ�RQ�6OHERV��ZKR�ZDV�WUDYHOOLQJ�ZLWK�KLP����.KDQ�ZDV�SXW�RQ�D�SODQH�EDFN�WR�3DNLVWDQ��$FFRUGLQJ�WR�WKH�:'5��*HUPDQ�EURDGFDVWLQJ�FRUSRUDWLRQ��MRXUQDOLVWV��WKH�WZR�KDG�DOVR�PHW�LQ�WKH�1HWKHUODQGV�LQ�-XO\�RI�WKDW�\HDU�����2Q�ERWK�WULSV�.KDQ�LV�VDLG�WR�KDYH�EHHQ�ORRNLQJ�IRU�(XURSHDQ�VXSSOLHUV�RI�PHDVXULQJ�HTXLSPHQW�WR�UHJLVWHU�QXFOHDU�WHVW�H[SORVLRQV�����$�GHFDGH�ODWHU�6OHERV�QDPH�UHVXUIDFHG�LQ�WKH�PHGLD��6RPH�ZHHNV�DIWHU�3DNLVWDQV�QXFOHDU�WHVWV��LQ�0D\� ������ MRXUQDOLVWV� RI� WKH�ZHHNO\�9ULM�1HGHUODQG� GLVFRYHUHG� WKDW� WKUHH� 6OHERV� SDFNDJHV�ZHUH� EHLQJ� KHOG� DW� 6FKLSKRO� DLUSRUW�� DQG� WZR�PRUH� LQ� $XVWULD� DQG� %HOJLXP���� %HVLGHV� 6OHERV�5HVHDUFK�� %RGPHUKRI� %9�� DQRWKHU� 6OHERV� FRPSDQ\�� ZDV� DOVR� LQYROYHG�� 7KRXJK� WKH� JRRGV�QRUPDOO\�ZRXOG�QRW�QHHG�DQ�H[SRUW�OLFHQFH��D�VSHFLDO�FDWFK�DOO�SURYLVLRQ�ZDV�DSSOLHG��EHFDXVH�RI�WKHLU� VXVSHFWHG� 3DNLVWDQL� GHVWLQDWLRQ���� $VNHG� DERXW� WKH� FDVH� LQ� DQ� LQWHUYLHZ�� .KDQ� VWDWHG�� �,�

�����������������������������������������������������������9 8 �$OEHUWV�DQG�.QLS��15&�+DQGHOVEODG�����)HEUXDU\�������9%9 �6HH�3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������9 : �=')�����)HEUXDU\�������DV�TXRWHG�LQ�3LMSHU�DQG�6FKQHLGHU��GH�9RONVNUDQW�����0DUFK�������7KH�6SHFLDO�:RUNV�2UJDQLVDWLRQ�ZDV�VHW�XS�XQGHU�WKH�'HIHQFH�PLQLVWU\�E\�SULPH�PLQLVWHU�=XOILNDU�$OL�%KXWWR�LQ�WKH�PLG�VHYHQWLHV��WR�FRQWURO�QXFOHDU�DFWLYLWLHV��)RUPHU�)LQDQFH�PLQVWHU�*KXODP�,VKDT�.KDQ�ZDV�DSSRLQWHG�DV�LWV�ILUVW�FRRUGLQDWRU��9 ; �%HFDXVH�RI�D�ZRUN�WR�UXOH�DFWLRQ�E\�WKH�XQLRQV��SHUVRQQHO�DW�WKH�DLUSRUW�ZHUH�FKHFNLQJ�HYHU\�VLQJOH�SDFNDJH���:A< ��9ULHQG�.KDQ�KRRUW����PDDQGHQ�HLVHQ���5HIRUPDWRULVFK�'DJEODG�����-XQH�������:�3 �&ROOHJH�YDQ�%HURHS�YRRU�KHW�%HGULMIVOHYHQ���/-1�QXPPHU��$������=DDNQU��$:%�������������2FWREHU�������:4 �:'5��:HVWGHXWVFKH�5XQGIXQN��SURJUDPPH�DV�TXRWHG�LQ��7KHR�-RQJHQGLMN�DQG�:DOWHU�6DPXHOV���1HGHUODQGHU�YHUGDFKW�YDQ�KRRIGURO�LQ�3DNLVWDDQV�DWRRP�VSLRQDJHVFKDQGDDO���7HOHJUDDI�����-DQXDU\�������:A5 ��%9'�YROJW�]DNHQYULHQG�YDQ�DWRRPVSLRQ�.DKQ���15&�+DQGHOVEODG�����-DQXDU\�������:6 �-RQJHQGLMN�DQG�6DPXHOV��7HOHJUDDI�����-DQXDU\�������: 7 �-RQJHQGLMN�DQG�6DPXHOV��7HOHJUDDI�����-DQXDU\�������:A8 �.R�&ROLMQ�DQG�3DXO�5XVPDQ���.KDQ�EHVWHOW�QRJ�VWHHGV�XLWUXVWLQJ�LQ�1HGHUODQG���9ULM�1HGHUODQG����-XQH�������: 9 �,I�WKHUH�LV�VXVSLFLRQ�WKDW�FHUWDLQ�QRQ�VWUDWHJLF�JRRGV�PD\�EH�XVHG�LQ�UHODWLRQ�ZLWK�ZHDSRQV�RI�PDVV�GHVWUXFWLRQ�WKLV�VSHFLDO�SURYLVLRQ�LV�XVHG��)URP�LWV�FRPLQJ�LQWR�IRUFH�LQ������LW�KDV�EHHQ�XVHG�DERXW�WZHQW\�WLPHV�LQ�WRWDO��VHH�³%HDQWZRRUGLQJ�YUDJHQ�YDQ�KHW�OLG�.DULPL�RYHU�KHW��QXFOHDLUH��VPRNNHOZHUN�YDQ�.KDQ�HQ�1HGHUODQGVH�FRQQHFWLHV´����0DUFK�������DW�ZZZ�PLQEX]D�QO���

� ���

NQRZ� 6OHERV� DV� D� ULJKWHRXV� 'XWFK� FLWL]HQ�� ZKR� WDNHV� DOO� SUHFDXWLRQV� WR� REH\� ODZV� DQG� UXOHV��%HIRUH�KH�GHOLYHUV�VRPHWKLQJ�WR�3DNLVWDQ��KH�DOZD\V�FKHFNV�HYHU\WKLQJ�DJDLQ�DQG�DJDLQ������7KH� OHJDO�EDWWOH�FRQWLQXHG�XQWLO� ODWH�������6OHERV�VROG�SDUW�RI� WKH�HTXLSPHQW� ��DQ�/0)���PDGH�FRPSUHVVRU�� W\SH� 9� ��� ����� /�� ���.� �� WR� D� FRPSDQ\� FDOOHG� 9�,� LQ� 6FKLHGDP�� ZKLFK�XQVXFFHVVIXOO\� DSSOLHG� IRU� DQ� H[SRUW� OLFHQFH� WR� 3DNLVWDQ� LQ�0D\� ������9�,� GLG� QRW� DFFHSW� WKDW�GHFLVLRQ� DQG� ZHQW� WR� FRXUW� LQ� ������ 7KH� ILUP� FODLPHG� WKDW� WKH� FRPSUHVVRU� ZDV� PHDQW� IRU� DQ�RUGLQDU\�FRPSDQ\��WKH�3HRSOHV�6WHHO�0LOO�LQ�.DUDFKL��GHVSLWH�6OHERV�KDYLQJ�SUHYLRXVO\�JLYHQ�WKH�,QVWLWXWH�IRU�,QGXVWULDO�$XWRPDWLRQ��SDUW�RI�.KDQV�.5/��DV�WKH�ILQDO�GHVWLQDWLRQ��,QWHOOLJHQFH�DQG�H[SRUW�FRQWURO�DXWKRULWLHV��KRZHYHU��FODLPHG�WKDW�WKH�FRPSUHVVRU�ZDV��YHU\�VXLWDEOH�IRU�XVH�ZLWK�WKH�*KDXUL�PLVVLOHV��DV�XVHG�LQ�WKH�3DNLVWDQL�PLVVLOH�SURJUDPPH�����,Q�2FWREHU������WKH�0LQLVWU\�RI� (FRQRPLF� $IIDLUV� ILQDOO\� ZRQ� WKH� FDVH� �� LW� ZDV� ULJKW� WR� UHIXVH� DQ� H[SRUW� OLFHQFH� IRU� WKH�FRPSUHVVRU���� :KDW� KDSSHQHG� ZLWK� WKH� RWKHU� 6OHERV� HTXLSPHQW� LPSRXQGHG� LQ� ����� LV� VWLOO�XQFOHDU���$FFRUGLQJ� WR�9ULM�1HGHUODQG� MRXUQDOLVW�.R�&ROLMQ��+HQN� 6OHERV� KDV� UHFHQWO\� EHHQ� LQYROYHG� LQ�PXFK�PRUH�EXVLQHVV�ZLWK�3DNLVWDQ��,Q�SDUWLFXODU�KH�LV�VDLG�WR�KDYH�EHHQ�LQYROYHG�LQ�WUDGLQJ�ODUJH�DPRXQWV�RI�JUDSKLWH�DQG�PDJQHVLXP�VWUDLJKW� IURP�&KLQD� WR�3DNLVWDQ��7KH�PDJQHVLXP�ZDV�RI�D�TXDOLW\�JUDGH�VSHFLILHG�RQ�WKH�OLVW�RI�WKH�1XFOHDU�6XSSOLHUV�*URXS�DQG�WKHUHIRUH�VXEMHFW�WR�'XWFK�H[SRUW� FRQWURO���� 6RXUFHV� ZLWKLQ� WKH� -XVWLFH� 'HSDUWPHQW� VD\� WKH\� WKLQN� WKDW� WKH� JUDSKLWH� ZDV�VXLWDEOH�IRU�XVH�LQ�XOWUDFHQWULIXJHV�����,Q� DGGLWLRQ� $PHULFDQ� LQWHOOLJHQFH� VRXUFHV� FODLP� WKDW� �D� FRPSDQ\� LQ� 1RUWK�+ROODQG�� �� ZKHUH�6OHERV¶�ILUP�LV�EDVHG���RUGHUHG�VR�FDOOHG�%DUDWURQ�SUHVVXUH�PHWHUV�IURP�D�*HUPDQ�GDXJKWHU�RI�DQ�XQLGHQWLILHG�$PHULFDQ�FRPSDQ\����7KHVH�PHWHUV�FDQ�EH�XVHG�WR�PHDVXUH�SUHVVXUH�LQ�IXHO�WDQNV�RI�PLVVLOHV��7KRXJK�DQ�H[SRUW�OLFHQFH�LV�UHTXLUHG��WKH�³1RUWK�+ROODQG´�FRPSDQ\�KDG�VROG�WKHP�WR���DJDLQ���WKH�,QVWLWXWH�RI�,QGXVWULDO�$XWRPDWLRQ��7KLV�FDVH�PD\�EH�WKH�VDPH�DV�WKH�RQH�PHQWLRQHG�LQ�RWKHU� PHGLD�� QDPHO\� DQ� LQYHVWLJDWLRQ� E\� WKH� FRXUW� LQ� +DDUOHP� LQWR� LOOHJDO� H[SRUW� RI� GXDO�XVH�JRRGV��VXSSRVHGO\�E\�6OHERV�DQG�VXSSRVHGO\�ZLWK�ILQDO�GHVWLQDWLRQ�/LE\D�����7KH� DQVZHUV� SURYLGHG�E\� WKH�'XWFK�JRYHUQPHQW� WR� D� VHULHV� RI�ZULWWHQ� SDUOLDPHQWDU\� TXHVWLRQV�DERXW�6OHERV�UROH��E\�*UHHQ/HIW�03�)DUDK�.DULPL��DUH�PHDJUH��EXW�GR�SURYLGH�VRPH�DGGLWLRQDO�LQIRUPDWLRQ���� $FFRUGLQJ� WR� WKH� JRYHUQPHQW�� ³6�´� �UHDG� 6OHERV�� GLG� QRW� JHW� DQ\�'XWFK� H[SRUW�SHUPLWV�IRU�WKH�H[SRUW�RI�GXDO�XVH�JRRGV�WR�3DNLVWDQ��/LE\D��,UDQ�RU�1RUWK�.RUHD�GXULQJ�WKH�ODVW�IRXU� \HDUV�� ,Q� ³D� QXPEHU� RI� FDVHV´� LW� KDV� DSSOLHG� WKH� FDWFK�DOO� FODXVH� WR� 6OHERV�� UHTXLULQJ� DQ�H[SRUW�SHUPLW�IRU�JRRGV�WKDW�QRUPDOO\�GR�QRW�QHHG�D�SHUPLW��'HWDLOV�RQ�WKHVH�FDWFK�DOO�FDVHV�KDYH������������������������������������������������������������:%: �+DUP�(GH�%RWMH�DQG�.R�&ROLMQ���'H�YDGHU�YDQ�GH�LVODPLWLVFKH�ERP�YHUNODDUW�]LFK�QDGHU���9ULM�1HGHUODQG�����-XO\�������:A; �/HREHUGRUIHU�0DVFKLQHQIDEULN�$*��$XVWULD��;%< �.R�&ROLMQ���([SORVLHYH�KDQGHO�WXVVHQ�0RQWIRRUW�HQ�,VODPDEDG���9ULM�1HGHUODQG�����)HEUXDU\�������;&3 �&ROOHJH�YDQ�%HURHS�YRRU�KHW�%HGULMIVOHYHQ�>&RXUW�RI�$SSHDO�IRU�7UDGH�DQG�,QGXVWU\@���/-1�QXPPHU��$������=DDNQU��$:%�������������2FWREHU�������DQG��/-1�QXPPHU��$%�����=DDNQU��$:%�������������-XQH�������;�4 �5HJXODWLRQ�UHJDUGLQJ�WULODWHUDO�WUDGLQJ�UHODWLRQV���GULHKRHNVKDQGHO�����,I�D�'XWFK�UHVLGHQW�HQJDJHV�LQ�D�ILQDQFLDO�DFWLRQ�ZLWK�UHJDUG�WR�VWUDWHJLF�JRRGV�ZKLFK�DUH�RXWVLGH�WKH�&RPPXQLW\�>PHDQLQJ�WKH�(XURSHDQ�8QLRQ��)UDQN�6�@��>���@���D�OLFHQFH�)LQDQFLDO�7UDIILF�6WUDWHJLF�JRRGV���YHUJXQQLQJ�)LQDQFLHHO�9HUNHHU�6WUDWHJLVFKH�JRHGHUHQ��RU�)96��LV�UHTXLUHG���;%5 �&ROLMQ��9ULM�1HGHUODQG�����)HEUXDU\�������;�6 �&ROLMQ��9ULM�1HGHUODQG�����)HEUXDU\�������; 7 �$OEHUWV�DQG�.QLS���20�RQGHU]RHNW�SDUWQHU�.KDQ���15&�+DQGHOVEODG�����)HEUXDU\�������7KH�OLQN�ZLWK�/LE\D�ZDV�HDUOLHU�PDGH�E\�0DWW�.HOOH\���3DNLVWDQ��QXFOHDU�EODFN�PDUNHW�OLQNHG���$3�����)HEUXDU\�������;%8 �³%HDQWZRRUGLQJ�NDPHUYUDJHQ�RYHU�PRJHOLMNH�YHUGHQNLQJ�GRRU�GH�3DNLVWDDQVH�UHJHULQJ�YDQ�KHW�OHYHUHQ�YDQ�QXFOHDLUH�WHFKQRORJLH�DDQ�,UDQ��/\ELs�HQ�1RRUG�.RUHD´����0DUFK�������%HDQWZRRUGLQJ�NDPHUYUDJHQ�RYHU�KHW�QXFOHDLUH�VPRNNHOZHUN�YDQ�.KDQ�HQ�1HGHUODQGVH�FRQQHFWLHV´����0DUFK�������³%HDQWZRRUGLQJ�NDPHUYUDJHQ�.DULPL�RYHU�H[SRUWYHUJXQQLQJ�DDQ�+HQN�6�´�����0DUFK�������$OO�DW��ZZZ�PLQEX]D�QO��

� ���

EHHQ�SURYLGHG�WR�03V�RQ�D�FRQILGHQWLDO�EDVLV����³5HOHYDQW�LQYHVWLJDWLRQ�VHUYLFHV´�FKHFN�ZKHWKHU�6OHERV� KDV� REVHUYHG� WKHVH� H[SRUW� UXOLQJV�� 3DNLVWDQ� KDV� EHHQ� DVNHG� WR� LQIRUP� WKH� 'XWFK�JRYHUQPHQW� LI� DQ\� GHWDLOV� DERXW� WKH� SRVVLEOH� LQYROYHPHQW� RI� ³D� 'XWFK� QDWLRQDO´� HPHUJH� IURP�WKHLU�LQYHVWLJDWLRQ�LQWR�.KDQ¶V�QXFOHDU�QHWZRUN���0DQ\�TXHVWLRQV� UHPDLQ�� WRR�� DERXW�6OHERV¶� LQYROYHPHQW� DV� D�PLGGOHPDQ� LQ�SUROLIHUDWLRQ�SURQH�WUDQVDFWLRQV� WKDW� KDYH� QHYHU� WRXFKHG� 'XWFK� VRLO��0RVW� UHFHQWO\�� 6OHERV� QDPH� KDV� DSSHDUHG� LQ�FRQMXQFWLRQ�ZLWK� WKH�ZHOO�SXEOLFLVHG� FDVH� RI� WKH�*HUPDQ� RZQHG� %%&�&KLQD� VKLS�� 7KH� %%&�&KLQD�� ODGHQ� ZLWK� QXFOHDU� HTXLSPHQW� DQG� RQ� LWV� ZD\� WR� /LE\D�� ZDV� FDXJKW� E\� $PHULFDQ�LQVSHFWRUV�LQ�,WDO\�RQ���2FWREHU���������7KH�FDWFK�UHYHDOHG�D�KRVW�RI�LQIRUPDWLRQ�RQ�SHUVRQV�DQG�FRPSDQLHV��ZKLFK�ZHUH�VXSSO\LQJ�/LE\D�ZLWK�QXFOHDU�UHODWHG�PDWHULDOV��,PSOLFDWHG�ZHUH�QRW�RQO\�6UL� /DQNDQ� EXVLQHVVPDQ� %XNKDUL� 6D\HG� $EX� 7DKLU� �DOOHJHGO\� �WKH� QHWZRUNV� FKLHI� ILQDQFLDO�RIILFHU�DQG�PRQH\�ODXQGHUHU���� WKH�0DOD\VLDQ�FRPSDQ\�6FRPL�3UHFLVLRQ�(QJLQHHULQJ����DQG�WKH�'XEDL�EDVHG�*XOI�7HFKQLFDO� ,QGXVWULHV� �*7,��RI�8.� FLWL]HQ�3HWHU�*ULIILQ��$OVR� RQ� ERDUG�ZHUH�DOXPLQLXP� FDVWLQJV� DQG� G\QDPRV� IURP� WKH� 7XUNLVK� FRPSDQ\� (7,� (OHNWURWHNQLN���� LQ� ZKLFK�6OHERV�KDV�D����SHUFHQW�VKDUH�������$OO�WKLV�ILWV�YHU\�ZHOO�ZLWK�6OHERV¶�EXVLQHVV�SURILOH���:H�ILQG�KDUG�WR�JHW�REMHFWV�IRU�FXVWRPHUV�DOO� RYHU� WKH� ZRUOG�� :H� KDYH� GHOLYHUHG� PDFKLQH� SDUWV� RI� VDZLQJ� PDFKLQHV�� JULQGLQJ� ZKHHOV��IL[LQJV��LURQ�DQG�PHWDO�DOOR\V��ODERUDWRULHV�DQG�WHVWLQJ�HTXLSPHQW��VRIWZDUH�DQG�PXFK�PRUH���KH�ZULWHV�RQ�KLV�ZHEVLWH�ZZZ�VOHERV�FRP��2Q�WKH�VLWH�KH�DOVR�DGYHUWLVHV�DQ�DQWL�IRXOLQJ�V\VWHP��RI�LQWHUHVW�WR�WKH�5R\DO�'XWFK�1DY\�����+LV�EXVLQHVVHV�VHHP�WR�FRPH�DQG�JR���D�\HDU�DJR�KLV�ZHEVLWH�DOVR� PHQWLRQHG� �7HFKQLFDO� 7URXEOHVKRRWLQJ��� �3UHIDE� %XLOGLQJV��� �7HFKQLFDO� SXUFKDVLQJ����7HFKQLFDO�(QJLQHHULQJ��DQG�HYHQ��:LQH�,PSRUW����EXW�QRW�DQ\PRUH������1R�ER\V�FKRLU�7KH�PRVW� H[SOLFLW� UHFHQW� SURRI� RI� 6OHERV� GHDOLQJV�ZLWK� 3DNLVWDQ� EHFDPH� NQRZQ� LQ� ODWH� ������ZKHQ� WKH�'XWFK�&DPSDLJQ�$JDLQVW�$UPV�7UDGH� UHYHDOHG� WKDW�6OHERV�5HVHDUFK�ZDV� RQH� RI� WKH�VSRQVRUV�RI�,6$0�������WKH�,QWHUQDWLRQDO�6\PSRVLXP�RQ�$GYDQFHG�0DWHULDOV�LQ�,VODPDEDG�DQG�.5/V� PDLQ� LQWHUQDWLRQDO� VFLHQWLILF� HYHQW����� 7KRXJK� ERWK� FRPSDQLHV� GHOLYHU� DOPRVW� LGHQWLFDO�WHFKQLFDO� VHUYLFHV�� DQRWKHU�'XWFK� FRPSDQ\�*HPFR� GHQLHG� KDYLQJ� DQ\WKLQJ� WR� GR�ZLWK� DQRWKHU�,6$0�VSRQVRU��*HPFR�3DNLVWDQ��3YW���/WG��1R�ORQJHU�FKLHI�RI�.5/��$4�.KDQ�ZDV�VWLOO�,6$0V�PDLQ� KRVW�� DV� �SDWURQ�� RI� WKH� RUJDQLVLQJ� FRPPLWWHH�� 7KH� �LQWHUQDWLRQDO� VFLHQWLILF� FRPPLWWHH��FRQVLVWHG��DPRQJ�RWKHUV��RI�.KDQV�IRUPHU�WXWRU��HPHULWXV�SURIHVVRU�%UDEHUV��VHH�DERYH����,Q�UHVSRQVH�WR�D�QXPEHU�RI�TXHVWLRQV�IURP�SDUOLDPHQWDULDQV�RQ�WKH�'XWFK�FRQWHQW�RI�WKH�PHHWLQJ�DQG� LWV� UHODWLRQ� WR� 'XWFK� QRQ�SUROLIHUDWLRQ� SROLF\�� WKHQ� )RUHLJQ� 0LQLVWHU� 'H� +RRS� 6FKHIIHU������������������������������������������������������������; 9 �7KLV�FRQILGHQWLDO�QRWH�FRQWDLQV�LQIRUPDWLRQ�RQ�DOO��DURXQG�WZHQW\��FDWFK�DOO�FDVHV�VLQFH�WKH�FUHDWLRQ�RI�WKLV�DG�KRF�OLFHQVLQJ�OHJLVODWLRQ�LQ�������(DUO\�$SULO������0V��.DULPL�DVNHG�WR��SDUWO\��GHFODVVLI\�WKLV�LQIRUPDWLRQ��$W�WKH�WLPH�RI�ZULWLQJ�QR�JRYHUQPHQWDO�DQVZHU�ZDV�DYDLODEOH�\HW��;�: �6HH�IRU�H[DPSOH�:LOOLDP�-��%URDG��'DYLG�(��6DQJHU�DQG�5D\PRQG�%RQQHU���$�WDOH�RI�QXFOHDU�SUROLIHUDWLRQ��+RZ�3DNLVWDQL�EXLOW�KLV�QHWZRUN���1HZ�<RUN�7LPHV�����)HEUXDU\�������;%; �3OXV�VRPH�IRUHLJQHUV�ZRUNLQJ�IRU�WKH�FRPSDQ\��OLNH�WKH�7DQQHU�EURWKHUV�IURP�6ZLW]HUODQG��3=<%< �$OEHUWV�DQG�.QLS���$WRRPKDQGHO�JLQJ�YLD�7XUNLMH���15&�+DQGHOVEODG�����)HEUXDU\�������3=<&3 �$OEHUWV�DQG�.QLS���$WRRPKDQGHO�JLQJ�YLD�7XUNLMH���15&�+DQGHOVEODG�����)HEUXDU\�������3=<�4 ��.150�WHVW�YLQGLQJ�RPVWUHGHQ�WHFKQHXW���GH�9RONVNUDQW�����)HEUXDU\�������7KH�V\VWHP�LV�PDGH�E\�65$)�1HGHUODQG�%9��DQ�DFURQ\P�IRU�6OHERV�5HVHDUFK�$QWL�)RXOLQJ��3=<%5 �2WKHU�NQRZQ�FRPSDQLHV�LQ�ZKLFK�6OHERV�ZDV�LQYROYHG�DUH��6OHHGRRUQ�6W\OLQJ��KRPH�DQG�RIILFH�IXUQLVKLQJ��EDQNUXSW�LQ��������5$�3URGXFWV��VRODU�HQHUJ\��GHDG��������0LOLHX��HQ�(QHUJLHV\VWHPHQ��HQHUJ\������VKDUH���VRXUFH��$OEHUWV�DQG�.QLS���3DNLVWDQ�YHUGHQNW�1HGHUODQGHU�+DQNV���15&�+DQGHOVEODG����)HEUXDU\��������3=<�6 �3UHVV�5HOHDVH�&DPSDJQH�WHJHQ�:DSHQKDQGHO����6HSWHPEHU�������VHH�ZZZ�VWRSDUPVWUDGH�RUJ��

� ���

DGPLWWHG� WKDW� .5/� LV� SDUW� RI� 3DNLVWDQV� QXFOHDU� ZHDSRQV� LQGXVWU\�� DQG� WKDW� �� WKRXJK� WKH�JRYHUQPHQW�GLG�QRW�KDYH�LQIRUPDWLRQ�WKDW�,6$0�ZDV�VHW�XS�WR�IXUWKHU�GHYHORS�WKDW�LQGXVWU\���LW�ZDV� �QRW� IXOO\�SRVVLEOH� WR� H[FOXGH� WKDW� WKH� H[FKDQJH�RI�NQRZOHGJH�DQG� LQIRUPDWLRQ�GXULQJ� WKH�V\PSRVLXP�GLUHFWO\�RU�LQGLUHFWO\�FRQWULEXWHV�WR�WKDW�GHYHORSPHQW�������&XULRXVO\��RQH�'XWFK�SDUWLFLSDQW��SURIHVVRU�'DV�RI�(&1�����DIWHUZDUGV�DGPLWWHG�WKDW�KH�KDG�EHHQ�WKHUH� LQ� WKH�SD\�RI� WKH�'XWFK� LQWHOOLJHQFH� VHUYLFH�$,9'��)XUWKHUPRUH�KH�KDG�ZRUNHG� IRU� WKHP�IUHTXHQWO\�� IRU�PDQ\�\HDUV�DQG� LQ�PDQ\�FRXQWULHV��$W� ,6$0������KH�KDG�HYHQ�YLVLWHG�.KDQ�DW�KRPH�DQG�PHW�SUHVLGHQW�0XVKDUUDI������$VNHG� DERXW� ,6$0�� 6OHERV� DQVZHUHG� D� MRXUQDOLVW�� �,� GR� EXVLQHVV� LQ� DOO� RI� $VLD�� EXW� QRW� LQ�3DNLVWDQ�� ,� KDYH� QRWKLQJ� WR� KLGH� DQG� ,� GRQW� HYHQ� JR� WR� WKH� V\PSRVLXP� P\VHOI�� ,� KDYH� RQO\�VSRQVRUHG� LW��7KDW� LV�QRWKLQJ�SHFXOLDU� WKRXJK"�>���@� ,I� ,�VXEVLGLVH� WKH�ER\V�FKRLU�RI�6W��3DQFUDV��\RX�DOVR�GRQW�DVN�VWUDQJH�TXHVWLRQV��GR�\RX"������

�����������������������������������������������������������3=< 7 �³%HDQWZRRUGLQJ�NDPHUYUDJHQ�YDQ�KHW�OLG�9DQ�9HO]HQ��63��RYHU�PRJHOLMNH�1HGHUODQGVH�EHGULMYHQ�HQ�SHUVRQHQ�ELM�V\PSRVLXP�YDQ�3DNLVWDDQV�NHUQZDSHQODERUDWRULXP´����2FWREHU������DW�ZZZ�PLQEX]D�QO��3=<%8 �(QHUJLHRQGHU]RHN�&HQWUXP�1HGHUODQG���(QHUJ\�5HVHDUFK�&HQWUH�RI�WKH�1HWKHUODQGV��3=< 9 �$DUW�%URXZHU���'H�RIIHUNRHLHQ�YDQ�HHQ�NHUQPDFKW���'H�*URHQH�$PVWHUGDPPHU�����)HEUXDU\������DQG�.52�5DGLR������)HEUXDU\�������3=<�: �$DUW�%URXZHU���1XFOHDLUH�YHUNHQQHUV���*URHQH�$PVWHUGDPPHU����6HSWHPEHU�������

� ���

&+$37(5�,,,�85(1&2��������������8UHQFR� /WG� LV� D� FRQVRUWLXP� RI� %ULWLVK� FRPSDQ\� ,1)/����� WKH� 'XWFK� ILUP� 8&1� %9� DQG� WKH�*HUPDQ�8UDQLW�*PE+�����)RXQGHG�LQ�������LW�LV�RQH�RI�WKH�ZRUOG¶V�OHDGLQJ�XUDQLXP�HQULFKPHQW�FRPSDQLHV��������� � ,W¶V� RULJLQ� DQG� KLVWRU\� LV� FORVHO\� OLQNHG� WR� WKH� UHVHDUFK� DQG� GHYHORSPHQW� RI�XOWUDFHQWULIXJH�WHFKQRORJ\��7RJHWKHU�ZLWK�JDV�GLIIXVLRQ�WHFKQRORJ\�LW�LV�WKH�PRVW�FRPPRQO\�XVHG�PHWKRG� RI� XUDQLXP� HQULFKPHQW�� 'XULQJ� WKH� ��V� DQG� ��V� WKHUH� ZHUH� KLJK� H[SHFWDWLRQV� RI� WKH�JURZWK�RI�QXFOHDU�HQHUJ\�IRU�SRZHU�SURGXFWLRQ��ZLWK�D�FRQVHTXHQW�QHHG�IRU�XUDQLXP�HQULFKPHQW�FDSDFLW\��7KH�VXSSRVLWLRQ�ZDV�WKDW�DOO�RU�PRVW�QXFOHDU�UHDFWRUV�ZRXOG�QHHG�HQULFKHG�XUDQLXP�DV�QXFOHDU�IXHO��KHQFH�WKH�IRXQGLQJ�RI�8UHQFR���.HHSLQJ�WKH�ZHDSRQV�RSWLRQV�RSHQ�7KH�KLVWRU\�RI�8UHQFR�LV�DOVR�FORVHO\�OLQNHG�WR�:HVWHUQ�(XURSH¶V�GHVLUH�WR�EH�LQGHSHQGHQW�IURP�WKH� 86� ZLWK� UHJDUG� WR� QXFOHDU� UHDFWRUV� DQG� HQULFKHG� XUDQLXP�� 7KH� 86� KDG� D� YHWR� RQ� WKH�UHSURFHVVLQJ�RI�DOO�QXFOHDU�IXHO�HQULFKHG�LQ�WKH�86�RU�EXUQHG�LQ�86�VXSSOLHG�RU��OLFHQVHG�QXFOHDU�UHDFWRUV�� +RZHYHU�� *HUPDQ\�� WKH� 8.� DQG� )UDQFH� ZDQWHG� WR� UHSURFHVV� XVHG� QXFOHDU� IXHO� WR�SURGXFH�SOXWRQLXP��2IILFLDOO\�WKH\�ZDQWHG�WR�XVH�WKH�SOXWRQLXP�LQ�)DVW�%UHHGHU�5HDFWRUV��VXFK�DV�.DONDU�LQ�*HUPDQ\�RU�3KHQL[�LQ�)UDQFH��ZKLFK�ZRXOG�EUHHG�PRUH�SOXWRQLXP�WKDQ�WKH\�XVHG��7KLV�ZDV�MXVWLILHG�RQFH�DJDLQ�E\�DQ�H[SHFWHG�VKRUWDJH�RI�XUDQLXP�DQG�XQUHDOLVWLF�SURJQRVHV�RI�QXFOHDU�HQHUJ\� JURZWK����� %\� HQULFKLQJ� WKHLU� XUDQLXP� WKHPVHOYHV��:HVW� (XURSHDQ� VWDWHV� ZHUH� IUHH� WR�UHSURFHVV� WKH� XVHG� QXFOHDU� IXHO� DQG� DOVR� IUHH� WR� GHYHORS� WKHLU� RZQ� LQGXVWULDO� SOXWRQLXP�LQIUDVWUXFWXUH��NHHSLQJ�WKHLU�QXFOHDU�ZHDSRQV�RSWLRQV�RSHQ���8UHQFR¶V�LQWHQWLRQ�ZDV�WR�EXLOG�D�SODQW�WR�PDQXIDFWXUH�XOWUDFHQWULIXJHV�DQG�DQ�HQULFKPHQW�SODQW�LQ�HDFK�RI�WKH�WKUHH�FRXQWULHV��*HUPDQ\��KRZHYHU��ZDV�XQWLO������QRW�DOORZHG�E\�WKH�86�WR�EXLOG�DQ�HQULFKPHQW�SODQW��LQ�RUGHU�WR�SUHYHQW�LW�IURP�SURGXFLQJ�QXFOHDU�ZHDSRQV�PDWHULDOV��6R��LQVWHDG�WKH�*HUPDQ�HQULFKPHQW�SODQW�ZDV�FRQVWUXFWHG�DW�WKH�'XWFK�8UHQFR�SODQW�LQ�$OPHOR��%XW�*HUPDQ\�ZDV�DOORZHG�WR�PDQXIDFWXUH�XOWUDFHQWULIXJHV��ZKLFK�WRRN�SODFH�DW�D�SODQW�LQ�-�OLFK��RZQHG�E\�WKH�*HUPDQ�8UHQFR�SDUWQHU�8UDQLW�*PE+��,Q� WKH�8.�WKH�PDQXIDFWXULQJ�SODQWV�ZHUH�FRQVWUXFWHG�DW�&DSHQKXUVW��QH[W�WR�WKH�JDV�GLIIXVLRQ�SODQW����7KH�(���SODQW�ZDV�WKH�ILUVW�JDV�FHQWULIXJH�IDFLOLW\�DW�&DSHQKXUVW��,W�EHJDQ�RSHUDWLRQV�LQ�������7KH�QH[W�JHQHUDWLRQ�JDV�FHQWULIXJH�SODQW��WKH�&DSHQKXUVW�(���SODQW��ZDV�FRPSOHWHG�LQ�������7KH�(���SODQW� EHJDQ� RSHUDWLRQV� LQ� ��������� 7KH� (��� ZDV� RSHUDWHG� XQWLO� ����� DQG� ZDV� VXEVHTXHQWO\�GHFRPPLVVLRQHG��MXVW�D�IHZ�\HDUV�DIWHU�WKH�FORVXUH�DQG�WKH�EHJLQQLQJ�RI�GHFRPPLVVLRQLQJ�RI�WKH�JDV� GLIIXVLRQ� SODQW����� 7ZR� \HDUV� DIWHU� WKH� FRPSOHWLRQ� RI� WKH� (��� SODQW� D� VHSDUDWH� FHQWULIXJH�

�����������������������������������������������������������3=<%; �,1)/�LV�D�IXOO�VXEVLGLDU\�RI�%ULWLVK�1XFOHDU�)XHO�/WG��%1)/���RZQHG�E\�WKH�8.�JRYHUQPHQW�3%3=< �6KDUHKROGHUV�RI�8&1�%9�DUH��'XWFK�JRYHUQPHQW���������DQG�6KHOO��3KLOLSV��'60��90)�6WRUN���������6KDUHKROGHUV�IURP�8UDQLW�*PE+�DUH��18.(0�*PE+�������DQG�(�21�$*��������0RUH�LQIRUPDWLRQ�RQ�KWWS���ZZZ�DQWHQQD�QO�ZLVH�XUDQLXP�HFXUH�KWPO�3%3%3 �%RHU��-RRS��8UDQLXP�HQULFKPHQW��1R�FDSDFLW\�JURZWK�LQ����\HDUV��:,6(�1HZV�&RPPXQLTXH����������2FW������������KWWS���ZZZ�DQWHQQD�QO�ZLVH��������������KWPO�3%3>4 �)XUWKHU�LQIRUPDWLRQ�DERXW�8UHQFR¶V�FRUSRUDWH�VWUXFWXUH�LV�FRQWDLQHG�LQ�$11(;�,�3%3=5 �.ROOHUW��5���'LH�3ROLWLN�GHU�ODWHQWHQ�3UROLIHUDWLRQ��������'89��S�����3%3>6 �-RKQVRQ��7LPRWK\�&���,QWHUQDO�PHPR�1066��)RUHLJQ�WULS�PHHWLQJ�VXPPDU\��/RXLVLDQD�(QHUJ\�6HUYLFHV�7HFKQLFDO�0HHWLQJ�DQG�6LWH�9LVLWV�����-XO\�������KWWS���ZZZ�QUF�JRY�PDWHULDOV�IXHO�F\FOH�IDF�PO����������SGI�3%3 7 �³&DSHQKXUVW��QHDU�&KHVWHU��ZDV�KRPH�WR�WKH�JDV�GLIIXVLRQ�XUDQLXP�HQULFKPHQW�SODQWV��'HFRPPLVVLRQLQJ�RI�WKHVH�KXJH�VWUXFWXUHV�EHJDQ�LQ������DQG�ZDV�FRPSOHWH�E\��������KWWS���ZZZ�EQIO�FRP�LQGH[�DVS["SDJH ������)LQDQFLDO�7LPHV�����1RY��������³%ULWDLQ�KDV�MXVW�EHJXQ�WR�GLVPDQWOH�DQ�REVROHWH�XUDQLXP�HQULFKPHQW�IDFWRU\�DW�&DSHQKXUVW�´��

� ���

HQULFKPHQW� SODQW�� &DSHQKXUVW�$��� ���� ZDV� EXLOW� IRU�PLOLWDU\� SXUSRVHV� DQG� IURP� ����� WKH� SODQW�RSHUDWHG�IRU�FLYLO�SXUSRVHV�������,Q� WKH� 1HWKHUODQGV�� WKH� HQULFKPHQW� SODQW� ZDV� EXLOW� VRXWKHDVW� RI� WKH� WRZQ� RI� $OPHOR� QHDU� WKH�*HUPDQ�ERUGHU��6LQFH�WKH�RSHQLQJ�RI�WKH�SLORW�SODQW�LQ�������GHVSLWH�PDQ\�DFWLRQV�DQG�OHJDO�VXLWV�E\�ORFDO�RSSRQHQWV��WKH�SODQW�KDV�EHHQ�VXEVWDQWLDOO\�H[SDQGHG�����7KH�VDPH�LV�WUXH�RI�WKH�SODQWV�LQ�*URQDX��*HUPDQ\���RQO\�D�IHZ�GR]HQ�NLORPHWUHV�IURP�WKH�'XWFK�8UHQFR�IDFWRU\�LQ�$OPHOR��DQG�&DSHQKXUVW����%XW�E\� WKH� WLPH�8UHQFR�KDG�EXLOW� LWV� ILUVW� VPDOO�HQULFKPHQW�SODQWV�� DURXQG������ LW�KDG�EHFRPH�FOHDU� WKDW� IDU� IHZHU�QXFOHDU� SRZHU�SODQWV�ZRXOG�EH� FRQVWUXFWHG� WKDQ�KDG�EHHQ� H[SHFWHG�RQO\� D�GHFDGH� EHIRUH�� ,QVWHDG� RI� D� VKRUWDJH� RI� HQULFKHG� XUDQLXP�� GHPDQG� ZDV� RQO\� RQH�KDOI� RI� WKH�FRPELQHG�SURGXFWLRQ�FDSDFLW\�DW�WKDW�WLPH�����7KH�86�KDG�KXJH�VWRFNSLOHV�RI�+(8�E\�WKHQ��DQG�5XVVLD� DOVR� KDG� DQ� HQRUPRXV� RYHUFDSDFLW\� RI� HQULFKPHQW� SODQWV� DQG� KXJH� VWRFNSLOHV� RI�+(8��RIIHULQJ�HQULFKHG�XUDQLXP�WR�WKH�:HVWHUQ�FRXQWULHV�DW� ORZ�SULFHV�����5XVVLD�KDG�DOVR�GHYHORSHG�DQG�FRQVWUXFWHG�/:5¶V�LQ�5XVVLD�DQG�VHYHUDO�:DUVDZ�3DFW�FRXQWULHV�����%HFDXVH� RI� WKLV� RYHUVXSSO\� DQG� WKH� ORZ� SULFHV� DVNHG� E\� WKH� 86� DQG� 5XVVLD� IRU� HQULFKPHQW��8UHQFR�PDGH�QR�SURILWV��RQO\� ORVVHV�� IRU� ILIWHHQ�\HDUV�����$� ODUJH�SDUW�RI� WKH�PRQH\�QHHGHG�IRU�UHVHDUFK�� GHYHORSPHQW�� FRQVWUXFWLRQ� DQG� RSHUDWLRQ� ZDV� SDLG� IRU� E\� WKH� WKUHH� JRYHUQPHQWV�LQYROYHG��������3ODQV�IRU�WKH�IXWXUH�8UHQFR�LV�QRZ�H[SDQGLQJ�IDVW��,WV�PDQDJHPHQW�LQWHQGV�WR�GRXEOH�LWV�SURGXFWLRQ�FDSDFLW\�DW�HDFK�RI� LWV� WKUHH� VLWHV�� &DSHQKXUVW� �8.��� *URQDX� �%5'�� DQG� $OPHOR� �1/�� DQG� LV� WU\LQJ� WR� JHW�SHUPLVVLRQ� WR� EXLOG� D� ODUJH� HQULFKPHQW� SODQW� DW� /HD�&RXQW\��1HZ�0H[LFR��86����� ,Q� WKLV� FDVH�8UHQFR� ZRUNV� WRJHWKHU� ZLWK� 86� QXFOHDU� ILUPV� LQ� WKH� /RXLVLDQQD� (QHUJ\� 6HUYLFHV� �/(6��FRQVRUWLXP���8UHQFR�WULHG�XQVXFFHVVIXOO\�WR�EXLOG�D�8&�HQULFKPHQW�SODQW�LQ�WKH�86�LQ�WKH���V��DOVR�DV�PDMRU�SDUWQHU�RI�WKH�/(6�FRQVRUWLXP��EXW�DEDQGRQHG�WKH�HIIRUW�LQ�WKH�IDFH�RI�VLJQLILFDQW�RSSRVWLRQ��1RZ�8UHQFR� LV�DJDLQ� WU\LQJ� WR�JHW�D� OLFHQVH� WR�EXLOG�D�SODQW� LQ� WKH�86��E\�IDU� WKH� ODUJHVW�PDUNHW� IRU�HQULFKHG�XUDQLXP��$�FHQWULIXJH�SODQW�LQ�WKH�86�ZLOO�KHOS�8UHQFR�WR�SURWHFW�LWVHOI�DJDLQVW�WKH�ULVNV�RI�DQ�XQIDYRXUDEOH�GROODU�HXUR�H[FKDQJH�UDWH��,W�ZLOO�DOVR�HQDEOH�8UHQFR�WR�FRPSHWH�ZLWK�WKH�86�SULYDWLVHG�HQULFKPHQW�FRPSDQ\�86(&��ZKLFK�LV�ZRUOG�OHDGHU�LQ�WKH�HQULFKPHQW�EXVLQHVV��������������������������������������������������������������3%3=8 �&XUUHQWO\��WKLV�JDV�FHQWULIXJH�SODQW�LQ�&DSHQKXUVW�KDV�D�FDSDFLW\�RI�������WRQ�6:8�\U��6:8� �6HSDUDWLYH�:RUN�8QLW��XQLW�IRU�WKH�FDSDFLW\�RI�XUDQLXP�HQULFKPHQW����6RXUFH��KWWS���ZZZ�DQWHQQD�QO�ZLVH�XUDQLXP�HIDF�KWPO�(15&�3%3 9 �&DSHQKXUVW�$��ZDV�EXOW�IRU�WKH�SXUSRVH�RI�SURGXFLQJ�HQULFKHG�XUDQLXP�IRU�WKH�PLOLWDU\��XVLQJ�8UHQFR�WHFKQRORJ\��+RZHYHU�WKH�SODQW�QHYHU�SURGXFHG�+(8��$IWHU�LW�ZDV�VWDUWHG�LQ���������LW�SURGXFHG�LQWHUPHGLDWH�HQULFKHG�XUDQLXP��LW�LV�DERYH���SHUFHQW�XUDQLXP������IRU�H[SRUW�WR�WKH�86�HLWKHU�IRU�IXUWKHU�HQULFKPHQW�WR�+(8��RU�LQ�H[FKDQJH�IRU�DQ�HTXLYDOHQW�DPRXQW�RI�+(8��>1XFOHDU�)XHO9RO�����1R����������������S����DQG��%ULWLVK�1XFOHDU�)DFLOLWLHV��KWWS���QXFOHDUZHDSRQDUFKLYH�RUJ�8N�8.)DFLOLW\�KWPO�@�3%3?: �&XUUHQWO\�8UHQFR�1HGHUODQG�%�9��KDV�D�OLFHQVH�IRU�D�FDSDFLW\�RI������WRQ�6:8�\U��7KH�SLORW�SODQW�LQ�$OPHOR��63���KDG�D�FDSDFLW\�RI����W6:8��¶�����WKH�GHPRQVWUDWLRQ�SODQW��63��������W6:8��¶�����DQG�WKH�FRPPHUFLDO�63���¶�����������W6:��,Q������WKH�FDSDFLW\�LV�H[SDQGHG�WR�������W6:��&XUUHQWO\�WKH�FDSDFLW\�LV�������W6:8��VHH�VRXUFH�LQ�QRWH�������3%3=; �$WRPLF�(QHUJ\�LQ�$XVWUDOLD��-XO\�������S����3>4�< �1XFOHDU�)XHO�������������S���3>4�3 �8&1�$QQXDO�5HSRUW�������S����3>4%4 �8&1�$QQXDO�5HSRUW������S��3>4�5 �1XFOHDU�)XHO��������������S�����

� ���

&XUUHQWO\�86(&�RSHUDWHV� D� JDV�GLIIXVLRQ� HQULFKPHQW�SODQW� LQ�3DGXFDK��.HQWXFN\�� ,W� WRRN�RYHU�WZR� JDV� GLIIXVLRQ� HQULFKPHQW� SODQWV� IURP� LWV� SUHGHFHVVRU�� WKH�'HSDUWPHQW� RI�(QHUJ\��'2(�� LQ���������� EXW� WKH� VHFRQG� IDFLOLW\� LQ� 3RUWVPRXWK�� 2KLR�� LV� NHSW� LQ� FROG� VWDQGE\��������� 86(&�DWWHPSWHG�WR�JDLQ�HQWU\�LQWR�8UHQFR�EXW�IDLOHG�����7R�VWD\�FRPSHWLWLYH��86(&�KDV�WR�FKDQJH�IURP�HQULFKPHQW�E\�WKH�JDV�GLIIXVLRQ�PHWKRG�WR�WKH�XOWUDFHQWULIXJH�WHFKQRORJ\����,Q�WKH���¶V�86(&�SUHGHFHVVRU��'2(��GHYHORSHG�XOWUDFHQWULIXJHV��EXW�VWRSSHG�WKLV�SURJUDP�EHIRUH�FRPPHUFLDOLVDWLRQ� FRXOG� WDNH� SODFH�� 1RZ� 86(&� KDV� UHVXPHG� WKLV� FHQWULIXJH� GHYHORSPHQW�SURJUDP�� ,Q� �����86(&� VLJQHG� DQ� DJUHHPHQW�ZLWK�'2(�RQ� FHQWULIXJH� GHYHORSPHQW�����2Q����-DQXDU\� ������ 86(&� DQQRXQFHG� WKDW� LW� KDV� FKRVHQ� 3LNHWRQ�� 2KLR� DV� WKH� VLWH� IRU� LWV� VR�FDOOHG��$PHULFDQ�&HQWULIXJH��FRPPHUFLDO�XUDQLXP�HQULFKPHQW�SODQW�SURMHFW�����2Q����)HEUXDU\�������86(&� VXEPLWWHG� D� OLFHQVH� DSSOLFDWLRQ� IRU� D� JDV� FHQWULIXJH� XUDQLXP� HQULFKPHQW� WHVW� IDFLOLW\� RU�³OHDG� FDVFDGH´����� ,Q� ������ 86(&� H[SHFWV� WR� EHJLQ� RSHUDWLQJ� WKH� $PHULFDQ� &HQWULIXJH�'HPRQVWUDWLRQ�)DFLOLW\�����7KH�GHPRQVWUDWLRQ� IDFLOLW\�� WR�EH� VLWHG� LQ�3RUWVPRXWK��ZLOO� FRQWDLQ� D�OHDG�FDVFDGH�RI�XS�WR�����IXOO�VL]H�FHQWULIXJH�����$�OHDG�FDVFDGH�LV�WKH�EDVLF�EXLOGLQJ�EORFN�RI�D�FRPPHUFLDO�HQULFKPHQW�SODQW�����7KH�86(&�FHQWULIXJHV�KDYH�DQ�HLJKWIROG�ODUJHU�RXWSXW�WKDQ�WKH�8UHQFR�XOWUDFHQWULIXJHV�DQG�DUH�FODLPHG�WR�KDYH�D�����\HDU�RSHUDWLQJ�OLIHWLPH������:LWKLQ�D�GHFDGH�LW�LV�OLNHO\�WKDW�FHQWULIXJH�WHFKQRORJ\�ZLOO�EH�WKH�GRPLQDQW�WHFKQLTXH�IRU�XUDQLXP�HQULFKPHQW��0DQ\�FRXQWULHV�KDYH�GRQH�UHVHDUFK�RQ�ODVHU�HQULFKPHQW��EXW�WKH�WHFKQRORJ\�LV�QRW�\HW�FRPPHUFLDOO\�YLDEOH��7KH�WKUHH�8UHQFR�FRXQWULHV��)UDQFH��-DSDQ��WKH�86$�DQG�RWKHUV�VSHQW�ODUJH�VXPV�RI�PRQH\�RQ�ODVHU�UHVHDUFK�LQ�WKH�QLQHWLHV��7KH�8UHQFR�FRXQWULHV�DORQH�VSHQW������PLOOLRQ�RQ� ODVHU� UHVHDUFK�XQWLO� ���������86(&� VXVSHQGHG�ZRUN�RQ�$9/,6� LQ������KDYLQJ� VSHQW�86���ELOOLRQ�RYHU� WKH�SURMHFWV� OLIHWLPH�����7KH� -DSDQHVH�/DVHU�-� UHVHDUFK�ZDV�HQGHG� LQ�������KDYLQJ�FRVW� ELOOLRQ� RI� \HQV� IURP� ����� RQZDUGV����� $QG� LQ� ����� )UDQFHV� &RPPLVVDULDW� j� O(QHUJLH�$WRPLTXH��&($��HQGHG�UHVHDUFK�LQWR�ODVHU�HQULFKPHQW�WRR��KDYLQJ�VSHQW�RYHU�¼���ELOOLRQ�RQ�WKH�SURMHFW�������8QWLO�UHFHQWO\�RQO\�WKH�86(&�IXQGHG�6LOH[�6\VWHPV�UHVHDUFK�LQ�$XVWUDOLD�ZDV�OHIW��86(&�VWRSSHG�IXQGLQJ� LW� IURP� $SULO� ��������� 6LOH[� 6\VWHPV� LV� QRZ� ORRNLQJ� IRU� D� QHZ� SDUWQHU� IRU� WKH�FRPPHUFLDOLVDWLRQ�RI�WKH�6,/(;�XUDQLXP�HQULFKPHQW�WHFKQRORJ\�����������������������������������������������������������������3>4%6 �1XFOHDU�)XHO�������������S����3>4 7 �86(&�SUHVV�UHOHDVH�����0D\�������7KH�&RXULHU�-RXUQDO�����0D\������3>4�8 �1XFOHDU�)XHO����������������S���3>4 9 �1XFOHDU�)XHO�������������S����3>4@: �1XFOHDU�)XHO��������������S���������3>4�; �1XFOHDU�)XHO������������3=5%< �8�6��(QULFKPHQW�&RUSRUDWLRQ�*DV�&HQWULIXJH�)DFLOLW\��KWWS���ZZZ�QUF�JRY�PDWHULDOV�IXHO�F\FOH�IDF�XVHFIDFLOLW\�KWPO�3=5&3 �86(&�$QQXDO�5HSRUW�������S�����KWWS���ZZZ�XVHF�FRP�Y����B���&RQWHQW�,QYHVWRUV�����SGI�86(&����$QQXDO5HSRUW�1DUUDWLYH�SGI�3=5�4 �1XFOHDU�)XHO���������������S���3=5%5 �KWWS���ZZZ�DQWHQQD�QO�ZLVH�XUDQLXP�HSXVHF�KWPO�3=5�6 �1XFOHDU�)XHO�������������S�������3=5 7 �/HQGHUV��0DXULFH��8UDQLXP�(QULFKPHQW�E\�JDVHRXV�&HQWULIXJH��S�������0D\�������'UHVGHQ��3=5%8 �/HQGHUV��0DXULFH��8UDQLXP�(QULFKPHQW�E\�*DVHRXV�&HQWULIXJH�����0D\�������'UHVGHQ�KWWS���ZZZ�XUHQFR�FRP�SGI�DWRPIRUXPB0D\B�����SGI�3=5 9 �KWWS���ZZZ�HWFHWHUDZHE�FRP�,<1&����������ODVHU�HQULFKPHQW�SGI�KWWS���ZZZ�MDSDQWLPHV�FR�MS�FJL�ELQ�JHWDUWLFOH�SO�"QQ��������F��KWP�3=5�: �1XFOHDU�)XHO�����-DQXDU\�����������KWWS���ZZZ�ZRUOG�QXFOHDU�RUJ�QHZV������ZGBMDQ���KWP�3=5%; �8UDQLXP�(QULFKPHQW��1XFOHDU�,VVXHV�%ULHILQJ�3DSHU�����-XQH�������KWWS���ZZZ�XLF�FRP�DX�QLS���KWP�3>6�< �6,/(;�±�86(&�VHWWOHPHQW����$SULO�������KWWS���ZZZ�DV[�FRP�DX�DV[�VWDWLVWLFV�$QQ+HDGHUV)RU,VVXHU�MVS"$6;&RGH VO[7LPH)UDPH SDVWB\HDUIURPB\HDU ����IURPBPRQWK �WRB\HDU ����WRBPRQWK �[ ��\ ��

� ���

$VWRQLVKLQJO\�� ,UDQ� KDV� EXLOW� D� SLORW� ODVHU� HQULFKPHQW� SODQW�� ZKLFK� DFWXDOO\� SURGXFHG� VPDOO�TXDQWLWLHV�RI�HQULFKHG�XUDQLXP��7KH�,$($�LV�VWXG\LQJ�WKLV�SURJUDP�����

������������������������������������������������������������

� ���

&+$37(5�,9�85(1&2�$1'�352/,)(5$7,21��$OWKRXJK�8UHQFR� GHQLHV� EHLQJ� UHVSRQVLEOH� IRU� SUROLIHUDWLQJ� LWV� HQULFKPHQW� WHFKQRORJ\� WR� RWKHU�FRXQWULHV��LQ�DW�OHDVW�WKH�FDVH�RI�%UD]LO��8UHQFR�KDV�DFNQRZOHGJHG�WKDW�LWV�WHFKQRORJ\�KDV�HQGHG�XS� LQ� ,UDT�� 3DNLVWDQ� DQG� YLD� 3DNLVWDQ� LQ� 1RUWK� .RUHD�� ,UDQ�� DQG� /LE\D����� $QG� DV� ZLOO� EH�GHPRQVWUDWHG�EHORZ��WKHUH�DUH�FHUWDLQO\�FDVHV�ZKHUH�SUREOHPV�ZLWK�VHFXULW\�KDYH�IDFLOLWDWHG�WKH�WKHIW�RI�WKLV�WHFKQRORJ\���$�GHOLYHU\�IRU�%UD]LO�2Q� �� $SULO� ����� WKH� ILUVW� ELJ� GHPRQVWUDWLRQ� DJDLQVW� 8UHQFR� $OPHOR� WRRN� SODFH�� ZLWK� DURXQG��������� SHRSOH� SURWHVWLQJ� DJDLQVW� WKH� H[SDQVLRQ� RI� WKH� HQULFKPHQW� SODQW�� ([SDQVLRQ� ZDV�QHFHVVDU\� DV� *HUPDQ\� KDG� DJUHHG� WR� H[SRUW� WR� %UD]LO� �� QXFOHDU� SRZHU� SODQWV�� LQFOXGLQJ� WKH�HQULFKHG�XUDQLXP�QHHGHG�IRU�WKH�ZKROH�OLIHWLPH�RI�WKH�UHDFWRUV��DV�ZHOO�DV�QXFOHDU�IXHO�SURGXFWLRQ�SODQWV��UHSURFHVVLQJ�DQG�HQULFKPHQW�SODQWV�����%HFDXVH�RI�WKH�OLPLWDWLRQV�RQ�LW�HQULFKLQJ�XUDQLXP��:HVW�*HUPDQ\�FRXOG�QRW� VXSSO\�HQULFKHG�XUDQLXP� WR�%UD]LO� LI� WKH�'XWFK�8UHQFR�SODQW�GLG�QRW�GHOLYHU�� $OWKRXJK� WKH� 'XWFK� JRYHUQPHQW� KDG� SURPLVHG� SDUOLDPHQW� LW� ZRXOG� KDYH� D� VD\� LQ�DSSURYLQJ�WKH�H[SRUW�IURP�WKH�1HWKHUODQGV��WKLV�SURYHG�WR�EH�XQQHFHVVDU\��DV�LQ������LW�EHFDPH�FOHDU� WKDW� WKH� %ULWLVK� 8UHQFR� SODQW� LQ� &DSHQKXUVW� KDG� H[SRUWHG� HQULFKHG� XUDQLXP� WR� %UD]LO�LQVWHDG�������$W�WKH�WLPH��%UD]LO�KDG�QRW�VLJQHG�WKH�QRQ�SUROLIHUDWLRQ�WUHDW\��137����WKH�UHDVRQ�FLWHG�E\�WKH�86�LQ� RSSRVLQJ� GHOLYHU\� RI� ORZ� HQULFKHG� XUDQLXP� �/(8����� WR� %UD]LO�� ,W� ZDV� IHDUHG� E\� WKH�LQWHUQDWLRQDO� FRPPXQLW\���� WKDW� WKH� WUDQVIHU� RI� VHQVLWLYH� QXFOHDU� WHFKQRORJ\�� HVSHFLDOO\�HQULFKPHQW� DQG� UHSURFHVVLQJ� WHFKQRORJ\� E\� *HUPDQ� ILUPV� WR� %UD]LO�� ZRXOG� UHVXOW� LQ� %UD]LO�PDNLQJ�QXFOHDU�ZHDSRQV�E\� LWVHOI��RU�E\�XVLQJ�8UHQFR�GHOLYHULHV�RI�HQULFKHG�XUDQLXP�� ,Q������%UD]LO�VWDUWHG�D�QXFOHDU�ZHDSRQV�SURJUDP��FRGH�QDPHG�³6ROLPRHV´��PDQDJHG�E\�WKH�VWDWH�RZQHG�%UD]LOLDQ�1XFOHDU�&RUSRUDWLRQ�1XFOHEUDV������7KLV�ZDV�EDVHG�RQ�WKH�FRPPHUFLDO�QXFOHDU�HQHUJ\�SURJUDP��ZKLFK�ZDV�XQGHU�WULODWHUDO�,$($�VDIHJXDUGV��EHFDXVH�*HUPDQ\�ZDV�DQ�137�PHPEHU���,Q������ WKH�'XWFK�8UHQFR�SDUWQHU��8&1��KDG�DOVR�EHHQ� LPSRUWLQJ�XUDQLXP� IRU�PRUH� WKDQ� IRXU�\HDUV�IURP�WKH�5|VVLQJ�PLQH�RI�WKH�%ULWLVK�PXOWLQDWLRQDO�5LR�7LQWR�=LQF�LQ�1DPLELD��RFFXSLHG�E\�6RXWK�$IULFD��$FFRUGLQJ�WR�WKH�8QLWHG�1DWLRQV������GHFUHH�QU����WKH�H[SRUW�RI�UDZ�PDWHULDO�IURP�1DPLELD� ZDV� IRUELGGHQ�� 7KH� 'XWFK� VWDWH� ZDV� WDNHQ� WR� FRXUW� RQ� WKH� JURXQGV� RI� UHFHLYLQJ�SOXQGHUHG� PLQHUDOV�� ,Q� ����� 7KH� 81� 6WHHULQJ� *URXS� IRU� 1DPLELD� GHFLGHG� WR� WDNH� 8UHQFR� WR�FRXUW������

�����������������������������������������������������������3>6%4 �1XFOHDU�)XHO��������������S�����������������S���������������S������������������S������1XFOHDU�(XURSH�:RUOGVFDQ�������������S�����3>6�5 �KWWS���ZZZ�ODND�RUJ�WHNVWHQ�YHU]HW�����������3')�3>6%6 �6XEOHWWH��&DUH\��1XFOHDU�:HDSRQV�)UHTXHQWO\�$VNHG�4XHVWLRQV��&K�����1XFOHDU�:HDSRQ�1DWLRQV�DQG�$UVHQDOV��KWWS���QXFOHDUZHDSRQDUFKLYH�RUJ�1ZIDT�1IDT����KWPO�%\������LW�ZDV�UHSRUWHG�WKDW�WKH�%UD]LOLDQ�,VRWRSLF�(QULFKPHQW�)DFLOLW\��/(,��KRXVHG�����FHQWULIXJHV��ZKLFK�FRXOG�SURGXFH�HQRXJK�+(8�IRU�RQH�RU�WZR�QXFOHDU�ERPEV�D�\HDU��&XUUHQWO\�WKHUH�DUH�SODQV�WR�H[SDQG�WKH�FDSDFLW\�WR���������6:8�\U��%UD]LO�DSSDUHQWO\�KDV�WKH�FDSDELOLW\�WR�SURGXFH�+(8��EXW�LW�LV�QRW�NQRZQ�WR�KDYH�GRQH�VR��%UD]LO�SODQV�WR�EXLOG�QXFOHDU�VXEPDULQHV�ZKLFK�XVH�+(8�DV�D�QXFOHDU�IXHO�LQ�WKHLU�QXFOHDU�UHDFWRUV��3>6 7 �/LJKW�(QULFKHG�8UDQLXP�>/(8@��XS�WR����SHUFHQW�8UDQLXP������+LJK�(QULFKHG�8UDQLXP�>+(8@��PRUH�WKDQ����SHUFHQW�8�����3>6�8 �6SHFWHU��/HRQDUG�6���7KH�1HZ�1XFOHDU�1DWLRQV��������S����������9LQWDJH��1<��3>6 9 �'H�/D�&RXUW��7���HD��'H�1XFOHDU�)L[�S��������������:,6(�$PVWHUGDP��3>6@: �7ZHQWVH�&RXUDQW������������

� ���

3UROHPV�ZLWK�VHFXULW\�7KHUH� DUH� DW� OHDVW� WZR� NQRZQ� FDVHV� ZKHUH� VHFUHW� XOWUDFHQWULIXJH� WHFKQRORJ\� KDV� OHDNHG� IURP�8UHQFR�HQULFKPHQW�IDFLOLWLHV��7KH�PRVW�ZHOO�NQRZQ�LQYROYLQJ�$4�.KDQ�LV�GHWDLOHG�LQ�&KDSWHU�,�DQG�,,��7KH�OHVVHU�NQRZQ�FDVH�LQYROYHG�WKH�8UHQFR�SODQW�DW�*URQDX����7KLV� FDVH� LQYROYHG� WKH� WKHIW�� VRPHZKHUH� EHWZHHQ� ����� DQG� ������ RI� EOXHSULQWV� ZLWK�VSHFLILFDWLRQV�RI�WKH�WKHQ�PRVW�PRGHUQ�8&��WKH�7&����DQG�SUREDEO\�D�OLVW�RI�VXEFRQWUDFWRUV��E\�IRUPHU�ZRUNHUV�RI�WKH�FRPSDQ\�0$1��ZKLFK�ZDV�WKHQ�D�PDLQ�VKDUHKROGHU�RI�8UDQLW��WKH�*HUPDQ�8UHQFR� ILUP�� 7KH� XOWUDFHQWULIXJH� H[SHUWV�� %UXQR� 6WHPPOHU� DQG� 6FKDDE�� VWLOO� KDG� ROG� HQWU\�SHUPLWV��DOORZLQJ�WKHP�WR�HDVLO\�HQWHU�8UDQLW�DQG�FRS\�WKH�YHU\�VHFUHW�EOXHSULQWV��ZKLFK�WKH\�VROG�WR� ,UDT�����6WHPPOHU� DQG�DQRWKHU�0$1�H[SHUW��:DOWHU�%XVVH�� VWD\HG� IRU�PRQWKV� LQ� ,UDT�GXULQJ������DQG������WR�KHOS�WKH�,UDTLV�VROYH�WHFKQLFDO�SUREOHPV�WKH\�KDG�ZLWK�SURGXFWLRQ�DQG�RSHUDWLQJ�RI� XOWUDFHQWULIXJHV����� 7KH� ,$($� GLVFRYHUHG� WKH� YHU\� DGYDQFHG�� FDUERQ� ILEHU� UHLQIRUFHG� 7&���XOWUDFHQWULIXJHV�LQ�,UDT��DIWHU�D�WRS�,UDTL�RIILFLDO�IOHG�WR�-RUGDQ��ZLWK�D�QXPEHU�RI�GLVFULPLQDWLQJ�GRFXPHQWV��������7KHUH� ZDV� DOVR� D� FDVH� RI� D� VXVSHFWHG� WKHIW� ������ ZKLFK� LI� FRQFOXVLYHO\� SURYHQ� ZRXOG� DOVR�GHPRQVWUDWH� KRZ� HDVLO\� QXFOHDU� SUROLIHUDWLRQ� FDQ� WDNH� SODFH�� 7KH� ILUP� /H\EROG�+HUDHXV�UHVSRQGHG�WR�WHQGHU�IURP�8UDQLW�IRU�GHOLYHU\�RI�FDVFDGH�WXELQJ��DXWRFODYHV�IRU�VWRUDJH�RI�QDWXUDO�8)���8)��FRQWDLQHUV�DQG�GHVXEOLPDWRUV��IRU�FRROLQJ�RI�HQULFKHG�8)���7R�EH�DEOH�WR�WHVW�ZKHWKHU�WKH\� FRXOG� FRQVWUXFW� WKLV� WHFKQRORJ\�� /H\EROG�+HUHDXV� OHJDOO\� REWDLQHG� WKH� EOXHSULQWV� IURP�8UDQLW�� $� /H\EROG� HPSOR\HH�� *RWWKDUG� /HUFK�� WKHQ� RUGHUHG� DXWRFODYHV�� FRQWDLQHUV� DQG�GHVXEOLPDWRUV� IURP� WKH�6ZLVV� ILUP�0HWDO:HUNH�%XFKV��0:%��ZKLFK�SURGXFHG� WKHP�XVLQJ� WKH�EOXHSULQWV��������� $� VPDOO� SDUW� RI� WKH� PDFKLQHU\� SURGXFHG� ZDV� VHL]HG� E\� 6ZLVV� FXVWRPV�� WKH�ODUJHVW�SDUW�KDG�DOUHDG\�EHHQ�VKLSSHG�WR�3DNLVWDQ��YLD�'XEDL�����)URP�WKH�GHVLJQ�RI�WKH�HTXLSPHQW�LW�ZDV�FRQFOXGHG�WKDW�LW�ZDV�VXLWDEOH�IRU�SURGXFLQJ�KLJK�HQULFKHG�XUDQLXP�������,Q������8UDQLW�LQIRUPHG�$DFKHQ�SURVHFXWRUV�WKDW�WKH�EOXHSULQWV��ZKLFK�LW�UHFRYHUHG�IURP�0:%��ZHUH� FRSLHV� IRU� ZKLFK� LW� KDG� FRS\ULJKW� SURWHFWLRQ�� 8UDQLW� VDLG� WKDW� /H\EROG�+HUHDXV� JRW� WKH�EOXHSULQWV� IURP� 8UHQFR�� ,Q� ����� FULPLQDO� SURVHFXWRUV� LQ� &RORJQH� FRQFOXGHG� WKDW� WZR� IRUPHU�/H\EROG� HPSOR\HHV��2WWR�+HLOLJEUXQQHU� DQG� /HUFK� KDG� VWROHQ� WKH�8UHQFR� NQRZ�KRZ�� ,Q� �����/H\EROG�+HUHDXV� VXJJHVWHG� WKDW� /HUFK� KDG� KDG� DFFHVV� WR� WKH� EOXHSULQWV�� EXW� LQ� ����� *HUPDQ�SURVHFXWRUV�OHW�LW�EH�NQRZQ�WKDW�WKH�LQYHVWLJDWLRQ�RI�WKH�DFFXVHG�KDG�EHHQ�WHUPLQDWHG��EHFDXVH�WKH�6ZLVV�DXWKRULWLHV�GLG�QRW�FRRSHUDWH������,QWHUHVWLQJO\��LQ�0DUFK�������+HLOLJEUXQQHU��QRZ�����VWDWHG�WKDW�/H\EROG�+HUHDXV�KDG�ERXJKW�WKH�ULJKWV� WR� WKH� NQRZ�KRZ� LQ� WKH� EOXHSULQWV� IURP� &RPSULPR� %9�� D� 'XWFK� ILUP�� ORFDWHG� LQ�$PVWHUGDP�� $W� WKH� WLPH�� &RPSULPR� KDG� IRUPHG� DQ� DUFKLWHFW�HQJLQHHULQJ� SDUWQHUVKLS� LQ� WKH�8UHQFR� SURMHFW� ZLWK� ,QWHUDWRP� *PE+�� LWVHOI� D� 6LHPHQV� VXEVLGLDU\�� ZKLFK� ZDV� DOVR� D� 8UHQFR�VXEFRQWUDFWRU�IRU�HQULFKPHQW�WHFKQRORJ\��$FFRUGLQJ�WR�+HLOLJEUXQQHU��&RPSULPR�GHYHORSHG�WKH������������������������������������������������������������3>6�; �1XFOHDU�)XHO�������������S����3 7 < �.�5�7LPPHUPDQ��������'H�-XGDVNXV��7LULRQ��S���������3 7 3 �1XFOHRQLFV�:HHN�������������([WUD�3 7 4 �'LH�6WHUQ������������3 7 5 �1XFOHDU�)XHO�������������S����3 7 6 �1XFOHDU�)XHO�������������([WUD�3 7%7 �1XFOHRQLFV�:HHN������������S�����3 7 8 �1XFOHDU�)XHO������������S���

� ���

WHFKQRORJ\� DQG� KDG� VROG� LW� ODWHU� WR� /H\EROG�+HUHDXV�� DURXQG� ����� RU� ������ $W� WKDW� WLPH� WKH�WHFKQRORJ\�ZDV�QRW�FRQVLGHUHG�VHQVLWLYH�HQRXJK�WR�EH�FODVVLILHG�E\� WKH�*HUPDQ�JRYHUQPHQW�����7KH�GLUHFWRU� RI�&RPSULPR�ZDV� WKH�'XWFK�3URIHVVRU��%DUHQGUHJW�� D� QXFOHDU� VFLHQWLVW�ZKR�NQHZ�$�4�.KDQ�DQG�KDG�YLVLWHG�3DNLVWDQ�VHYHUDO�WLPHV����,Q�)HEUXDU\������� WKH�6ZLVV� VWDUWHG�DQ� LQTXLU\� LQWR� WKUHH�VXVSHFWV�DOOHJHG�E\�0DOD\VLD� WR�KDYH�EHHQ�LQYROYHG�LQ�WKH�SURGXFWLRQ�RI�JDV�FHQWULIXJH�SDUWV�IRU�/LE\D�E\�WKH�0DOD\VLDQ�ILUP�0DFKLQH�6KRS� ������2QH� RI� WKH� VXVSHFWV�ZDV� DJDLQ�*RWWKDUG�/HUFK��7KH�0DOD\VLDQ� SROLFH� DOOHJHG� WKDW�/HUFK�WULHG�WR�REWDLQ�VXSSOLHV�RI�SLSHV�IRU�WKLV�SODQW��$�IRUPHU�,UDQLDQ�RIILFLDO�VDLG�/HUFK�KDG�DOVR�EHHQ� QDPHG� E\� ,UDQ� DV� KDYLQJ� EHHQ� LQYROYHG� LQ� 7HKHUDQ¶V� QXFOHDU� SURJUDP����� 7KH� RWKHU� WZR�VXVSHFWV�DUH�ZHOO�NQRZQ�IURP�RWKHU�FDVHV�RI�QXFOHDU�VPXJJOLQJ��)ULHGULFK�7LQQHU�DQG�KLV�VRQ�8UV��)��7LQQHU��)ULHGULFK�7LQQHU� LV�FXUUHQWO\�SUHVLGHQW�RI� WKH�6ZLVV�FRPSDQ\�&HWHF��DQG� LV�D� IRUPHU�H[HFXWLYH� DW� WKH� 6ZLVV� ILUP� 9$7�� ZKLFK� VXSSOLHG� YDOYHV� WR� 8UHQFR� VLQFH� �������� DQG� DOVR�VXSSOLHG�YDOYHV�IRU�/H\EROG�+HUHDXV�IXUQDFHV��8UV�7LQQHU��WKH�WKLUG�VXVSHFW��ZDV�D�FRQVXOWDQW�WR�WKH�PDQDJHU��%�6�$�7DKLU�� RI� WKH�0DOD\VLDQ� FRPSDQ\�0DFKLQH�6KRS������� KLUHG� WR� VHW� XS� WKH�FHQWULIXJH�SDUWV�IDFWRU\�XQWLO�KH�OHIW�LQ�2FW��������/DUJH�TXDQWLWLHV�RI�DOXPLQLXP�DQG�VWHHO�WXEHV�ZHUH� GHOLYHUHG� WR� WKH�0DOD\VLDQ� IDFWRU\� E\� D�*HUPDQ� VXEVLGLDU\� RI� WKH� 6LQJDSRUH�EDVHG� ILUP�%LNDU� 0HWDO� 3WH� /WG������ 7KH� FHQWULIXJH� SDUWV� PDGH� LQ� 0DOD\VLD� ZHUH� PDGH� DFFRUGLQJ� WR�EOXHSULQWV�RULJLQDWLQJ�IURP�8UHQFR�GHVLJQV��VWROHQ�E\�.DKQ������,W� LV� UHPDUNDEOH� WKDW� RYHU� VXFK� D� ORQJ� SHULRG� WKH� VDPH� LQGLYLGXDOV� DQG� FRPSDQLHV� DUH� QDPHG�UHSHDWHGO\�DV�EHLQJ�FRQQHFWHG�ZLWK�FDVHV�RI�QXFOHDU� VPXJJOLQJ�RU�EURNHULQJ��4XHVWLRQV� UHPDLQ�DERXW�KRZ�PDQ\�RWKHU�ILUPV�UHFHLYHG�EOXHSULQWV�IURP�8UDQLW�ZKHQ�WKH\�UHDFWHG�WR�WHQGHU�IURP�WKH�ILUP"�,W�LV�DOVR�QRW�NQRZQ�ZKHWKHU�WKLV�ZDV�WKH�QRUPDO�ZD\�RI�RUGHULQJ�DW�WKH�8UHQFR�SODQWV�LQ�WKH� 1HWKHUODQGV� DQG� WKH� 8.��2QH� WKLQJ� LV� FOHDU�� D� ODUJH� ILUP� OLNH� 8UHQFR� KDV� PDQ\� �IRUPHU��VXEFRQWUDFWRUV��ZKLFK�DUH�PXFK�OHVV�FRQWUROOHG�UHJDUGLQJ�WKHLU�H[SRUW�RI�GXDO�XVH�JRRGV�RU�NQRZ�KRZ�WKDQ�8UHQFR�LWVHOI����

�����������������������������������������������������������3 7�9 �1XFOHDU�)XHO������������3 7 : �1XFOHDU�)XHO������������3 7 ; �.ROOHUW��S�����3=8%< �1XFOHDU�)XHO�����������3=8&3 �,+7�������������*XDUGLDQ��������������/$�7LPHV��������������1XFOHDU�)XHO��������������

� ���

&21&/86,21��7+(�137�',/(00$��7KH�UROH�SOD\HG�E\�8UHQFR�LQ� WKH�SUROLIHUDWLRQ�RI�QXFOHDU� WHFKQRORJ\�DV�GHVFULEHG�LQ� WKLV�SDSHU�LOOXVWUDWHV� FOHDUO\� WKDW� WKH� XVH� RI� WKLV� WHFKQRORJ\� IRU� SHDFHIXO� RU� PLOLWDU\� SXUSRVHV� FDQQRW� EH�VHSDUDWHG��)XUWKHUPRUH��WKH�H[LVWLQJ�LQWHUQDWLRQDO�WUHDW\�REOLJDWLRQV��ZKLFK�FDOO�IRU�IUHH�DFFHVV�WR�QXFOHDU� WHFKQRORJ\� IRU� DOO�PHPEHU� FRXQWULHV� DQG� IRU� DSSO\LQJ� VDIHJXDUGV� WR� QXFOHDU�PDWHULDOV��KDYH� LQ� IDFW� REIXVFDWHG� DQ� H[WUHPHO\� LPSRUWDQW� IDFW�� WKH� GHYHORSPHQW� RI� QXFOHDU� SRZHU� DV� D�VRXUFH�RI�HQHUJ\�PDNHV�LW�SRVVLEOH�WR�FUHDWH�WKH�EDVLV�RI�D�QXFOHDU�ZHDSRQV�SURJUDP��$�NH\�SDUW�RI�WKLV�LV�WKH�QXFOHDU�HQULFKPHQW�WHFKQRORJ\�GHYHORSHG�VR�VXFFHVVIXOO\�E\�8UHQFR����%ODFN�PDUNHW�H[FXVHV�7KH� SURGXFWLRQ� RI� WKH� 3DNLVWDQL� DQG� LQGHHG� DQ\� QXFOHDU� ZHDSRQV� GHSHQG� RQ� WKH� LPSRUW� RI�WHFKQRORJ\��HTXLSPHQW�DQG�PDWHULDOV�DV�ZHOO�DV�WKH�GHYHORSPHQW�RI�NQRZ�KRZ��7KH�FDVH�ZH�KDYH�GHVFULEHG�FODULILHV�KRZ�WKLV�FDQ�ZRUN�LQ�SUDFWLFH��([LVWLQJ�OHJDO�DUUDQJHPHQWV�DQG�JXLGHOLQHV�IRU�VWRSSLQJ�RU�FRQWUROOLQJ� WKH�H[SRUW�RI� WKH� WHFKQRORJ\�IURP�WKH�1HWKHUODQGV�KDYH�IDLOHG�RQ�PDQ\�RFFDVLRQV�� 7KH� ZLGHO\� KHOG� H[SODQDWLRQ� RI� WKLV� IDLOXUH� LV� EDVHG� RQ� DQ� DQDO\VLV� LQ� ZKLFK� WKLV�H[SRUWLQJ�SURFHVV� LV� ODUJHO\�VHHQ�DV�D�SUREOHP�RI� LOOHJDOLW\��+HQFH�WKH�FRQVWDQW�XVH�RI� WKH� WHUP�EODFN�PDUNHW��7KH�XVH�RI�WKLV�WHUPLQRORJ\�LQ�LWVHOI�VXJJHVWV�WKDW�WKH�VROXWLRQ�WR�WKH�SUROLIHUDWLRQ�SUREOHP�QHHGV�RQO\�EH�VRXJKW�LQ�WKH�WLJKWHQLQJ�XS�RI�WKH�ODZV�DQG�H[SRUW�UHJXODWLRQV��3UHVLGHQW�%XVK¶V�UHFHQW�VSHHFK�RQ�WKH�SUROLIHUDWLRQ�LVVXH�ZDV�D�FOHDU�LOOXVWUDWLRQ�RI�WKLV��+H�VWDWHG�����6HFRQG�� ,� FDOO� RQ� DOO� QDWLRQV� WR� VWUHQJWKHQ� WKH� ODZV� DQG� LQWHUQDWLRQDO� FRQWUROV� WKDW� JRYHUQ�SUROLIHUDWLRQ��$W� WKH�8�1�� ODVW� IDOO�� ,� SURSRVHG� D� QHZ�6HFXULW\�&RXQFLO� UHVROXWLRQ� UHTXLULQJ� DOO�VWDWHV�WR�FULPLQDOL]H�SUROLIHUDWLRQ��HQDFW�VWULFW�H[SRUW�FRQWUROV��DQG�VHFXUH�DOO�VHQVLWLYH�PDWHULDOV�ZLWKLQ�WKHLU�ERUGHUV��7KH�6HFXULW\�&RXQFLO�VKRXOG�SDVV�WKLV�SURSRVDO�TXLFNO\��$QG�ZKHQ�WKH\�GR��$PHULFD�VWDQGV�UHDG\�WR�KHOS�RWKHU�JRYHUQPHQWV�WR�GUDIW�DQG�HQIRUFH�WKH�QHZ�ODZV�WKDW�ZLOO�KHOS�XV�GHDO�ZLWK�SUROLIHUDWLRQ���������+RZHYHU��WKH�FRPSDQLHV�LQYROYHG�ZHUH�ODUJHO\�RSHUDWLQJ�SHUIHFWO\�OHJDOO\��(LWKHU�WKH\�H[SRUWHG�OLFHQFH�IUHH�SURGXFWV��ZKLFK�FRXOG�EH�XVHG�WR�EXLOG�NH\�SDUWV�RI�WKH�XUDQLXP�HQULFKPHQW�FKDLQ��RU�WKH\� H[SRUWHG� GXDO� XVH� JRRGV� DV� SHUPLWWHG� XQGHU� H[LVWLQJ� OHJLVODWLRQ�� $OWHUQDWLYHO\� DQG� PRUH�FRQWURYHUVLDOO\��NH\�LWHPV�ZHUH�H[SRUWHG�WR�WKLUG�FRXQWULHV�IURP�ZKHUH�WKH\�ZHUH�UHGLUHFWHG�WR�WKH�ILQDO� GHVWLQDWLRQ�� ,W� LV�� KRZHYHU��PLVOHDGLQJ� WR� GHVFULEH� WKLV� VROHO\� DV� D� JLJDQWLF� EODFN�PDUNHW�RSHUDWLRQ� WKDW�DYRLGHG� WKH�VFUXWLQ\�RI�YDULRXV� ODZ�HQIRUFHPHQW�DJHQFLHV�� ,W� LV�PRUH�DFFXUDWH� WR�GHVFULEH� WKLV� DV� D� FROOHFWLRQ� RI� SDUWLFXODU� WUDQVDFWLRQV�� ZKLFK� ZHUH� QRW� ORRNHG� DW� WRR� FORVHO\�EHFDXVH�RI�WKH�SUHYDLOLQJ�SROLWLFDO�ZLQGV����:H�EHOLHYH�WKDW�WKH�SRVW�IDFWR�UHFRQVWUXFWLRQ�RI�WKH�HYHQWV�DV�D�NLQG�RI�VRSKLVWLFDWHG�EDQN�UREEHU\�LV�PLVOHDGLQJ�DQG�ZLOO�LQ�IDFW�UHVXOW�LQ�IXUWKHU�PLVWDNHV�EHLQJ�PDGH�LQ�GHYHORSLQJ�HIIHFWLYH�DQWL�SUROLIHUDWLRQ�SROLFLHV���7KH�GHYHORSPHQW�RI�8UHQFR�WHFKQRORJ\�DQG�LWV�GLVVHPLQDWLRQ�WRRN�SODFH�ZLWKLQ�DQ�LQWHUQDWLRQDO�SROLF\�IUDPHZRUN��ZKLFK�DOORZHG�VXFK�D�SURFHVV�WR�WDNH�SODFH��6KRUW�WHUP�RSSRUWXQLVWLF�IRUHLJQ�SROLF\� ZDV� XQIRUWXQDWHO\� DLGHG� E\� WKH� QDWXUH� RI� WKH� 1RQ�3UROLIHUDWLRQ� 7UHDW\� LWVHOI�� ZKLFK� LQ������������������������������������������������������������3=8�4 ��5HPDUNV�E\�WKH�3UHVLGHQW�RQ�ZHDSRQV�RI�PDVV�GHVWUXFWLRQ�SUROLIHUDWLRQ���)RUW�/HVOH\�-��0F1DLU���1DWLRQDO�'HIHQVH�8QLYHUVLW\��:DVKLQJWRQ��'�&������)HEUXDU\�������

� ���

DUWLFOH� �� VWDWHV� WKH� IROORZLQJ�� ³1RWKLQJ� LQ� WKLV� 7UHDW\� VKDOO� EH� LQWHUSUHWHG� DV� DIIHFWLQJ� WKH�LQDOLHQDEOH�ULJKW�RI�DOO�3DUWLHV�WR�WKH�7UHDW\�WR�GHYHORS��UHVHDUFK��SURGXFWLRQ�DQG�XVH�RI�QXFOHDU�HQHUJ\�IRU�SHDFHIXO�SXUSRVHV�ZLWKRXW�GLVFULPLQDWLRQ�DQG�LQ�FRQIRUPLW\�ZLWK�$UWLFOHV�,�DQG�,,�RI�WKLV�7UHDW\�³��,W� WKHUHIRUH� DFNQRZOHGJHV� WKH� ULJKWV� RI� DOO� PHPEHU� FRXQWULHV� WR� XVH� QXFOHDU� WHFKQRORJ\� IRU�SHDFHIXO�SXUSRVHV��DV�D�TXLG�SUR�TXR�IRU�QRW�EXLOGLQJ�QXFOHDU�ZHDSRQV����6WUDWHJLF�EOLQGQHVV�,Q�WKH�VHYHQWLHV�DQG�HLJKWLHV�3DNLVWDQ�ZDV�D�IURQWOLQH�VWDWH�LQ�WKH�(DVW�:HVW�FRQIURQWDWLRQ��,W�ZDV�QRW� LQ� WKH� LQWHUHVWV� RI� WKH�:HVW� WR� FRQIURQW� 3DNLVWDQ� RQ� WKH� SUHSDUDWLRQV� LW�ZDV�PDNLQJ� IRU� LWV�QXFOHDU� ZHDSRQ� SURJUDPPH�� OHW� DORQH� WKH� LPSRUW� RI� WKH� EDVLF� HOHPHQWV� RI� WKH� HQULFKPHQW�WHFKQRORJ\��7KH�FRXQWU\¶V�VWUDWHJLF�SRVLWLRQ�PDGH�LW�DQ�LPSRUWDQW�VWUDWHJLF�DVVHW�IRU�WKH�86�DV�D�FRXQWHU� WR�SRVW�UHYROXWLRQDU\�,UDQ��FRPPXQLVW�&KLQD�DQG�LQ� WKH� HLJKWLHV�VXSSRUWLQJ�WKH�$IJKDQ�UHYROW�DJDLQVW�WKH�6RYLHW�RFFXSDWLRQ����6LPLODUO\��,UDT�ZDV�JLYHQ�PD[LPXP�OHHZD\�LQ�DUPLQJ�LWVHOI�IRU�WKH���������ZDU�ZLWK�,UDQ��7KH�86�JRYHUQPHQW�FRXQWHUHG� WKH�JURZLQJ�,UDQLDQ� LQIOXHQFH� LQ� WKH� UHJLRQ�E\�VXSSRUWLQJ�,UDT� LQ� LWV�LQYDVLRQ� DQG� VXEVHTXHQW� ORQJ� ZDU� DJDLQVW� ,UDQ�� 7KLV� VXSSRUW� H[WHQGHG� WR� WKH� H[SRUW� RI�VRSKLVWLFDWH� ZHDSRQU\� WR� ,UDT�� LQFOXGLQJ� WKH� WHFKQRORJ\� WKDW� FRXQWU\� QHHGHG� IRU� LWV� QXFOHDU�ZHDSRQV�SURJUDP����7RGD\� 3DNLVWDQ� LV� DQ�$PHULFDQ� DOO\� LQ� LWV�ZDU� RQ� WHUURULVP�� 6LQFH� WKLV� LQYROYHV� WKH� FORVH� FR�RSHUDWLRQ�RI�WKH�SUHVHQW�PLOLWDU\�UXOHU�RI�3DNLVWDQ�IRU�PLOLWDU\�RSHUDWLRQV�DQG��LQGHHG��DOO�DVSHFWV�RI�86�SRZHU�SURMHFWLRQ�LQWR�FHQWUDO�$VLD��LW�ZRXOG�EH�HQWLUHO\�FRQWUDU\�WR�86�LQWHUHVWV�WR�ZHDNHQ�KLV� SRZHU�� 7KDW� LV� ZK\� WKHUH� KDYH� EHHQ� QR� RYHUW� VDQFWLRQV� RU� UHSULVDOV� DJDLQVW� WKH� VWDWH� RI�3DNLVWDQ� LQ� UHVSRQVH� WR� WKH� GHYHORSPHQW� RI� LWV� QXFOHDU� ZHDSRQV� DQG� WKH� H[SRUW� RI� WKH� UHODWHG�WHFKQRORJ\��,QVWHDG��DOO�EODPH�DQG�UHVSRQVLELOLW\�KDV�EHHQ�SODFHG�VTXDUHO\�RQ�WKH�VKRXOGHUV�RI�WKH�IDPRXV�0U��.KDQ��,W�LV�HQWLUHO\�EH\RQG�WKH�ERXQGV�RI�EHOLHI�WKDW�WKH�3DNLVWDQL�JRYHUQPHQW�LWVHOI�ZDV� QRW� LQYROYHG� LQ� WKH� YDULRXV� H[FKDQJHV� RI� QXFOHDU� WHFKQRORJ\�ZLWK�1RUWK�.RUHD�� ,UDQ� DQG�/LE\D�������7KHUH� DUH� VRPH� LQGLFDWLRQV� WKDW� WKH� 86� JRYHUQPHQW� LV� SOD\LQJ� D� UROH� LQ� WKH� FXVWRG\� RI� WKH�3DNLVWDQL� QXFOHDU� IRUFHV��7KHUH� LV� DOVR� D�SRVVLEOH�SROLWLFDO� DGMXQFW� WR� WKLV��8.� IRUHLJQ�PLQLVWHU�-DFN� 6WUDZ� VXJJHVWHG� WKDW� ³WKH� LQWHUQDWLRQDO� FRPPXQLW\¶� ZDV� H[DPLQLQJ� WKH� IHDVLELOLW\� RI�DFFHSWLQJ�3DNLVWDQ�DV�DQ�RIILFLDO�1:6«�´������7KH� SROLWLFDO� LPSOLFDWLRQ� LV� YHU\� FOHDU�� LI� D� VWDWH� KDV� PDGH� LWVHOI� LQWR� D� NH\� DOO\� RI� WKH� PRVW�SRZHUIXO�VWDWH�LQ�WKH�ZRUOG��WKHQ�LW�KDV�D�SRZHUIXO�OHYHU�WR�SXUVXH�LWV�RZQ�LQWHUHVWV��HYHQ�LI�WKHVH�XOWLPDWHO\�UXQ�FRXQWHU�WR�WKRVH�RI�WKDW�VWDWH����7KHUH�DUH�RWKHU�H[DPSOHV�RI�FORVH�FRRSHUDWLRQ�EHWZHHQ�WKH�QXFOHDU�ZHDSRQV�VWDWHV�DQG�WKHLU�DOOLHV�LQ�WKH�DUHD�RI�QXFOHDU�WHFKQRORJ\���������������������������������������������������������������3=8%5 ��0XVKDUUDI�1DPHG�LQ�1XFOHDU�3UREH���:DVKLQJWRQ�3RVW����)HEUXDU\�������3=8�6 �1XFOHRQLFV�:HHN�����0DUFK�������

� ���

5XVVLD��IRU�H[DPSOH��KDV�LQ�WKH�ODVW�GHFDGH�SURYLGHG�,UDQ�ZLWK�QXFOHDU�UHDFWRUV�DQG�WKH�QHFHVVDU\�WHFKQLFDO� H[SHUWLVH� WR� UXQ� WKHP�� ,UDQLDQ� WHFKQLFLDQV�ZHUH� DOVR� WUDLQHG� LQ� WKLV��$� ODUJH��PRGHUQ�/:5� QHHGV� PRUH� NQRZ�KRZ� DQG� WKHUHIRUH� WUDLQLQJ� WR� UXQ� WKDQ� D� UHODWLYHO\� VLPSOH� GXDO�XVH�UHDFWRU��2QFH�WKHVH�SURJUDPPHV�DUH�LQLWLDWHG�WKH�UHFHLYLQJ�FRXQWU\�FDQ�GHYHORS�WKHP�IXUWKHU��,Q�,UDQ� DQ� HQULFKPHQW� SURJUDPPH� ZDV� DOVR� VHW� XS� ZLWKRXW� QRWLI\LQJ� WKH� ,$($�� ,VUDHO¶V� QXFOHDU�SURJUDPPH�ZDV�VHW�XS�ZLWK�)UHQFK�KHOS��ZKLOH�,QGLD�ZDV�VXSSRUWHG�E\�&DQDGD����7KH� NH\� SRLQW� LV� WKDW� WKH� VR�FDOOHG� FLYLOLDQ� KHOS� ODLG� WKH� IRXQGDWLRQV� IRU� WKH� PLOLWDU\� QXFOHDU�SURJUDPPH����,QKHUHQW�FRQWUDGLFWLRQV�7KHUH�LV�DQRWKHU�EXLOW�LQ�EDUULHU�WR�HIIHFWLYH�FRXQWHU�SUROLIHUDWLRQ�SROLF\��DQG�WKDW�LV�WKH�REYLRXV�FR�H[LVWHQFH�RI�WZR�VHWV�RI�UXOHV��RQH�IRU�WKH�QXFOHDU�ZHDSRQ�VWDWHV��WKH�RWKHU�IRU�WKH�QRQ�QXFOHDU�ZHDSRQV�VWDWHV��:H�GLVWLQJXLVK�ILYH�FDWHJRULHV�RI�LQYROYHPHQW������ 7KH� ILYH� QXFOHDU� ZHDSRQ� VWDWHV� UHFRJQLVHG� E\� WKH� 1RQ� 3UROLIHUDWLRQ� 7UHDW\�� 86�� 5XVVLDQ�

)HGHUDWLRQ��&KLQD��)UDQFH��8QLWHG�.LQJGRP���� 7KH� WKUHH�� SRVVLEO\� IRXU� QXFOHDU�ZHDSRQ� VWDWHV�ZKLFK�KDYH� QRW� VLJQHG� WKH�137�EXW� KDYH� D�

VXEVWDQWLDO�QXFOHDU�VWULNH�FDSDELOLW\��,VUDHO��,QGLD��3DNLVWDQ��0RVW�SXEOLF�LQWHOOLJHQFH�HVWLPDWHV�JLYH�1RUWK�.RUHD�D�VPDOO�QXPEHU�RI�QXFOHDU�ERPEV�����

��� 7KH�VWDWHV�FRYHUHG�E\�D�QXFOHDU�XPEUHOOD��7KLV�LQFOXGHV�DOO� WKH�1$72��IRUPDO��QRQ�QXFOHDU�ZHDSRQV�VWDWHV��ZKLFK�DUH�LQYROYHG�LQ�1$72�QXFOHDU�SODQQLQJ�DQG�GRFWULQH��6L[�RI�WKHVH�QRQ�QXFOHDU�PHPEHU�VWDWHV�KDYH�WDVNHG�SDUW�RI�WKHLU�DLU�IRUFHV�WR�FDUU\�RXW�QXFOHDU�VWULNHV�ZLWK�86�QXFOHDU�ZHDSRQV��LQ�DFFRUGDQFH�ZLWK�86�QXFOHDU�GRFWULQH�����

��� 7KH�VWDWHV�VWULYLQJ�WR�JDLQ�QXFOHDU�ZHDSRQV��HLWKHU�ZLWKLQ�RU�ZLWKRXW�WKH�137�IUDPHZRUN��OLNH�,UDQ�����

��� 7KH� VWDWHV� ZLWK� D� FLYLO� QXFOHDU� SURJUDPPH�� ZKLFK� JLYHV� WKHP� WKH� DELOLW\� WR� EXLOG� QXFOHDU�ZHDSRQV�LI�WKH\�ZHUH�WR�PDNH�WKH�SROLWLFDO�FKRLFH�WR�GR�VR��7KLV�LV�D�JURXS�RI����FRXQWULHV��DV�GHILQHG� LQ� WKH�&RPSUHKHQVLYH�7HVW�%DQ�7UHDW\��7KH\� LQFOXGH�VWDWHV� OLNH�-DSDQ��5HSXEOLF�RI�.RUHD�DQG�%UD]LO�����

�,W� LV� JHQHUDOO\� UHFRJQLVHG� WKDW� WKH� 137� LV� DQ� H[WUHPHO\� LPSRUWDQW� WUHDW\� IRU� FXUELQJ� WKH�SUROLIHUDWLRQ�RI�QXFOHDU�ZHDSRQV� WHFKQRORJ\��+RZHYHU��DV�ZH�KDYH�VKRZQ� LQ�RXU�FDVH� VWXG\�� LW�KDV� D� EXLOW�LQ� FRQWUDGLFWLRQ� WKDW� DW� OHDVW� SDUWLDOO\� GHIHDWV� LWV� SXUSRVH�� 7KDW� LV�� LW� H[SOLFLWO\�HQFRXUDJHV��LQ�DUW�����WKH�SUROLIHUDWLRQ�RI�QXFOHDU�WHFKQRORJ\�VXLWDEOH�IRU�EXLOGLQJ�ZHDSRQV��7KH�PHDVXUHV� VXJJHVWHG� E\�3UHVLGHQW�%XVK� LQ� KLV�)HEUXDU\� ����� VSHHFK�� FXUELQJ� WKH� H[SRUW� RI� WKH�HQULFKPHQW� SDUW� RI� WKH� QXFOHDU� F\FOH� DQG� DJUHHLQJ� WR� PRUH� LQWHUQDWLRQDO� LQVSHFWLRQV�� VRXQG�UHDVRQDEOH�EXW�KDYH�D� IDWDO� IODZ��7KH\�ZRXOG�QRW�DSSO\� WR�D� VXEVWDQWLDO�JURXS�RI� LQGXVWULDOLVHG�VWDWHV�LQFOXGHG�LQ�WKH�FDWHJRULHV�GHVFULEHG�DERYH��,QVWHDG��WKH�JUHDW�PDMRULW\�RI�WKH�VLJQDWRULHV�RI�WKH�137�ZRXOG�EH�DIIHFWHG��,W�ZRXOG��LQ�VKRUW�EH�DQRWKHU�ZD\�RI�HQVXULQJ�WKH�FRQWLQXDWLRQ�RI�WKH�QXFOHDU�ZHDSRQV�VWDWXV�TXR��ZLWK�QR�DWWHPSW�WR�FRPSO\�ZLWK�WKH�RWKHU�SDUW�RI�WKH�137�ZKLFK�LV�UDUHO\�PHQWLRQHG�E\�VSRNHVSHUVRQV�RI�WKH�QXFOHDU�ZHDSRQV�VWDWHV��1:6���WKH�REOLJDWLRQ�WR�VWULYH�IRU�QXFOHDU�GLVDUPDPHQW��DUW�������������������������������������������������������������������3=8 7 �KWWS���ZZZ�IDV�RUJ�QXNH��3=8%8 ��4XHVWLRQV�RI�&RPPDQG�DQG�&RQWURO���3(11��3URMHFW�RQ�(XURSHDQ�1XFOHDU�1RQ�3UROLIHUDWLRQ��5HVHDUFK�5HSRUW���������3=8 9 �KWWS���ZZZ�IDV�RUJ�QXNH��3=8�: �KWWS���ZZZ�FWEWR�RUJ� �

� ���

$W� WKH� VDPH� WLPH� WKH� 86� JRYHUQPHQW� KDV� HQJDJHG� LQ� D� VWUDWHJLF� SROLF\� VKLIW�� ZKLFK� RSHQO\�GHFODUHV�WKDW�SUH�HPSWLYH�ZDUIDUH�LV�OHJLWLPDWH��,W�UHVHUYHV�WKH�ULJKW�WR�ZDJH�QXFOHDU�ZDU�DJDLQVW�VWDWHV�� ZKLFK� WKUHDWHQ� WR� DUP� WKHPVHOYHV� ZLWK� :0'����� ,Q� VR� GRLQJ� WKH� µQHJDWLYH� VHFXULW\�DVVXUDQFHV¶��SURPLVHV�PDGH�E\�WKH�QXFOHDU�ZHDSRQV�VWDWHV�LQ������QRW�WR�DWWDFN�WKH�VLJQDWRULHV�RI�WKH�137�ZLWK�QXFOHDU�ZHDSRQV��DUH�YLRODWHG�������7KH� 137� UHYLHZ� FRQIHUHQFHV� �ZKLFK� DUH� KHOG� HYHU\� ILYH� \HDUV��� DUH� PHDQW� WR� UHYLHZ� WKH�HIIHFWLYHQHVV� RI� WKH�137�� L�H�� WKH� GHJUHH� WR�ZKLFK� WKH� VLJQDWRULHV� KDYH� DGKHUHG� WR� WKHLU� WUHDW\�FRPPLWPHQWV��,Q�������DOO�VWDWH�SDUWLHV�H[FHSW�)UDQFH��ZKLFK�DEVWDLQHG��UHFRPPLWWHG�WKHPVHOYHV�WR�QXFOHDU�GLVDUPDPHQW��,Q������WKHVH�FRPPLWPHQWV�ZLOO�DJDLQ�EH�UHYLHZHG��7KHUH�ZLOO�REYLRXVO\�EH�VKDUS�GLVDJUHHPHQWV�EHWZHHQ�WKH�QXFOHDU�ZHDSRQV�VWDWHV�DQG�WKRVH�FRXQWULHV��ZKLFK�DJUHHG�LQ������ WR� WKH�XQOLPLWHG�H[WHQVLRQ�RI� WKH�137��7KH� IRUPHU� �PRVW�FOHDUO\� WKH�86��ZLOO�EH� VHHQ� WR�KDYH� ODUJHO\� LJQRUHG� WKHLU� FRPPLWPHQWV�� ZKLOH� DW� WKH� VDPH� WLPH� GHYHORSLQJ� FRDOLWLRQV� RI� WKH�ZLOOLQJ� �OLNH� WKH� 1XFOHDU� 6XSSOLHUV� *URXS�� WKH� 3UROLIHUDWLRQ� 6HFXULW\� ,QLWLDWLYH�� WR� FRXQWHU�KRUL]RQWDO� SUROLIHUDWLRQ�� ZKLOH� LJQRULQJ� YHUWLFDO� SUROLIHUDWLRQ�� 0RUHRYHU�� WKH� 86� FRQWLQXHV� WR�GHYHORS�QHZ�QXFOHDU�ZHDSRQV�V\VWHPV�DQG�PHDQV�RI�GHSOR\LQJ�WKHP�������,W�LV�HQWLUHO\�ORJLFDO�WKDW�FRXQWULHV�WKDW�VHH�WKHPVHOYHV�WKUHDWHQHG�E\�86�SUH�HPSWLQJ�SROLFLHV��RU�E\�WKRVH�RI�RWKHU�QXFOHDU�ZHDSRQV�VWDWHV��ZLOO�VWULYH�WR�GHYHORS�ZHDSRQV�ZKLFK�ZLOO�HIIHFWLYHO\�GHIHQG�WKHP�DJDLQVW�SRVVLEOH�DWWDFN��$QG�RI�FRXUVH��LQ�VR�GRLQJ��WKH\�ZLOO�EH�JLYLQJ�D�UHDVRQ�IRU�EHLQJ�DWWDFNHG��7KLV�LV�D�GHDGO\�VSLUDO��ZKLFK�VKRXOG�EH�DYRLGHG����7KH�DUJXPHQW�PDGH�E\�3UHVLGHQW�%XVK�DERXW�WKH�QHHG�WR�FKDQJH�WKH�137�LV�ZHOO�WDNHQ��%XW�LW�LV�RI�FRXUVH�DQ�DWWDFN�RQ�WKH�SULQFLSOH�RI�IUHH�WUDGH��RQ�WKH�DUWLFOH���ULJKW�WR�QXFOHDU�WHFKQRORJ\��,W�ZRXOG�FUHDWH�D�GH� IDFWR�ROLJRSRO\�RI�QXFOHDU� VXSSOLHUV��ZKLFK�ZRXOG� LQ� WXUQ�JLYH� ULVH� WR�VWURQJ�RSSRVLWLRQ� IURP�H[LVWLQJ� DQG�SRWHQWLDO�137� VLJQDWRULHV�� ,Q� IDFW� LW� LV�PRUH� ORJLFDO� WR� DJUHH� DQG�LPSOHPHQW�D�FRPSUHKHQVLYH�ILVVLOH�PDWHULDO�WUHDW\�WKDW�EDQV�DOO�UHSURFHVVLQJ�DQG�XUDQLXP�SODQWV��FDSDEOH�RI�SURGXFLQJ�SXUH�SOXWRQLXP�DQG�HQULFKHG�XUDQLXP���'LUHFWRU�(O%DUDGHL�RI� WKH� ,$($�DJUHHG�ZLWK�3UHVLGHQW�%XVK� WR� VRPH�GHJUHH��EXW�KH� DGGHG� WKH�H[WUHPHO\�UHOHYDQW�FRPPHQW����2I� FRXUVH�� D� IXQGDPHQWDO� SDUW� RI� WKH� QRQ�SUROLIHUDWLRQ� EDUJDLQ� LV� WKH� FRPPLWPHQW� RI� WKH� ILYH�QXFOHDU�6WDWHV� UHFRJQL]HG�XQGHU� WKH�QRQ�SUROLIHUDWLRQ� WUHDW\�²�%ULWDLQ��&KLQD��)UDQFH��5XVVLD�DQG�WKH�8QLWHG�6WDWHV�²�WR�PRYH�WRZDUG�GLVDUPDPHQW��5HFHQW�DJUHHPHQWV�EHWZHHQ�5XVVLD�DQG�WKH�8QLWHG�6WDWHV�DUH�FRPPHQGDEOH��EXW�WKH\�VKRXOG�EH�YHULILDEOH�DQG�LUUHYHUVLEOH��$�FOHDU�URDG�PDS� IRU� QXFOHDU� GLVDUPDPHQW� VKRXOG� EH� HVWDEOLVKHG�²� VWDUWLQJ�ZLWK� D�PDMRU� UHGXFWLRQ� LQ� WKH�������� QXFOHDU� ZDUKHDGV� VWLOO� LQ� H[LVWHQFH�� DQG� EULQJLQJ� LQWR� IRUFH� WKH� ORQJ�DZDLWHG�&RPSUHKHQVLYH�1XFOHDU�7HVW�%DQ�7UHDW\�������

�����������������������������������������������������������3=8%; ��1XFOHDU�3RVWXUH�5HYLHZ�/HDNV��2XWOLQHV�7DUJHWV��&RQWLQJHQFLHV���$UPV�&RQWURO�7RGD\��$SULO�������KWWS���ZZZ�DUPVFRQWURO�RUJ�DFW�����B���QSUDSULO���DVS���%XVK�$GPLQLVWUDWLRQ�5HOHDVHV�6WUDWHJ\�RQ�:0'�7KUHDW���$UPV�&RQWURO�7RGD\��-DQXDU\�)HEUXDU\�������KWWS���ZZZ�DUPVFRQWURO�RUJ�DFW�����B������ZPGVWUDWHJ\BMDQIHE���DVS��3 9 < ��8�6��1XFOHDU�3ROLF\���1HJDWLYH�6HFXULW\�$VVXUDQFHV����KWWS���ZZZ�DUPVFRQWURO�RUJ�IDFWVKHHWV�QHJVHF�DVS�3 9 3 �6HH��KWWS���ZZZ�DUPVFRQWURO�RUJ�DFW�����B���(QHUJ\'HSDUWPHQW�DVS�3 9 4 �,$($�'LUHFWRU�*HQHUDO�'U��0RKDPHG�(O%DUDGHL���6DYLQJ�2XUVHOYHV�)URP�6HOI�'HVWUXFWLRQ���1HZ�<RUN�7LPHV�����)HEUXDU\�������

� ���

7KDW� LV�� WKH� ODFN� RI� YHULILDEOH� DQG� LUHYHUVLEOH� VWHSV� WRZDUGV� QXFOHDU� GLVDUPDPHQW� ZLOO� PDNH� D�VWURQJHU�QRQ�SUROLIHUDWLRQ�UHJLPH�ZLWKLQ�D�OHJDO�IUDPHZRUN�H[WUHPHO\�GLIILFXOW�LI�QRW�LPSRVVLEOH�WR�DFKLHYH����3RLQWV�IRU�D�SROLF\�GHEDWH�,Q�YLHZ�RI�WKH�DERYH�GHYHORSPHQWV�ZH�VHH�D�QHHG�IRU�D�IXQGDPHQWDO�GHEDWH�DORQJ�WKH�IROORZLQJ�OLQHV����

��� �7KH�137�HQFRXUDJHV�WKH�SUROLIHUDWLRQ�RI�QXFOHDU�WHFKQRORJ\��7KLV�LQ�WXUQ�FDQ�EH�XVHG�E\�137�VLJQDWRULHV�WKDW�ZDQW�WR�GHYHORS�QXFOHDU�ZHDSRQV���

��� &HUWDLQ�FKDQJHV�DUH�QHHGHG��LQ�SDUWLFXODU�WKH�SURKLELWLRQ�RQ�WKH�SURGXFWLRQ��WUDQVSRUW�DQG�XVH�RI�ILVVLOH�PDWHULDOV�LQ�WKH�QXFOHDU�IXHO�F\FOH���

��� 7KLV�ZLOO�UXQ�LQWR�VWURQJ�RSSRVLWLRQ�IURP�137�VLJQDWRULHV�ZKR�ZDQW�WR�PDLQWDLQ�PD[LPXP�DFFHVV�WR�QXFOHDU�WHFKQRORJ\���

��� 7KHUH�LV�QR�VLJQ�DW�DOO�WKDW�WKH�1:6�ZLOO�DEROLVK�WKHLU�QXFOHDU�ZHDSRQV���

��� 8QLODWHUDOLVW�PHFKDQLVPV��OLNH�WKH�WUDGLWLRQDO�DUPV�H[SRUW�FRQWURO�DJUHHPHQWV�16*��07&5�DQG�QRZ�HVSHFLDOO\�36,��DUH�EHLQJ�VHW�XS�RXWVLGH�WKH�137�DQG�RWKHU�PXOWLODWHUDO�DUPV�FRQWURO�PHFKDQLVPV��&'��E\�WKH�86��ZKLFK�LV�VXSSRUWHG�LQ�WKLV�E\�D�QXPEHU�RI�PDLQO\�:HVWHUQ���RULHQWHG��LQGXVWULDOLVHG�FRXQWULHV��7KLV�PHDQV�WKDW�WKH�137�LV�EHLQJ�XQGHUPLQHG���

��� 3UHVVXUH�ZLOO�ORJLFDOO\�EH�DSSOLHG�WR�FKDQJH�WKH�137��DORQJ�WKH�OLQHV�VXJJHVWHG�E\�0U��(O%DUDGHL�DQG�3UHVLGHQW�%XVK��XQGRXEWHGO\�ZLWK�DOO�NLQGV�RI�YDULDWLRQV�RQ�WKH�WKHPH���PDQ\�VLJQDWRULHV�ZLOO�OLNHO\�UHVLVW�WKLV��7KHUHIRUH�D�VWDOHPDWH�LQ������VHHPV�YHU\�SRVVLEOH���

��� 7KH�WKUHDWHQLQJ�GHDGORFN�DW�WKH�137�UHYLHZ�FRQIHUHQFH�LQ������PDNHV�D�VHULRXV�GHEDWH�DQ�XUJHQW�QHFHVVLW\��$�NH\�SRLQW�WKDW�VKRXOG�EH�WDNHQ�XS�LV�WKH�FRQQHFWLRQ�EHWZHHQ�QXFOHDU�HQHUJ\�DQG�QXFOHDU�ZHDSRQV���

��� ,W�ZRXOG�EH�ZLVH�WR�LQLWLDWH�WKLV�GHEDWH�TXLFNO\��DQG�QRW�ZDLW�IRU�D�YHU\�OLNHO\�GHDGORFN�LQ�������$�SRVVLEOH�SRLQW�RI�DFWLRQ�FRXOG�EH�VXJJHVWLQJ�FKDQJHV�LQ�WKH�137��(LWKHU�WKH�WUHDW\�LWVHOI�FRXOG�EH�FKDQJHG��RU�DGGLWLRQDO�SURWRFROV�DGGHG��

� ���

$11(;�,��85(1&2�&25325$7(�6758&785(��,Q� WKH� 1HWKHUODQGV� WKH� VWDWH� RULJLQDOO\� SRVVHVVHG� ���� RI� WKH� VKDUHV� RI� 8UHQFR� 1HGHUODQG�� WKH� SULYDWH�FRPSDQLHV� 3KLOLSV�� '60�� 90)�:HUNVSRRU�� 569� DQG� 6KHOO� WKH� UHVW�� ,Q� ����� D� GHFLVLRQ� ZDV� PDGH� WR�FRQVWUXFW� QHZ�'XWFK� DQG�*HUPDQ� HQULFKPHQW� SODQWV� DW�$OPHOR�� 7KLV� GHFLVLRQ�ZDV� D� FRQVHTXHQFH� RI� D�JLDQW�QXFOHDU�FRQWUDFW�*HUPDQ\�KDG�PDGH�ZLWK�WKH�PLOLWDU\�UHJLPH� LQ�%UD]LO��7KH�'XWFK�8UHQFR�SULYDWH�FRPSDQLHV��KRZHYHU��ZHUH�QRW�SUHSDUHG�WR�LQYHVW�DV�WKH\�GLG�QRW�H[SHFW�WR�PDNH�D�SURILW��'HSDUWLQJ�IURP�WKH�RULJLQDO�LQWHQWLRQ�RI�WKH�JRYHUQPHQW�WKDW�WKH�FRPSDQLHV�WDNH�RYHU�DOO�WKHLU�VKDUHV�LQ�WKH�ORQJ�WHUP��WKH�JRYHUQPHQW�±�FOHDUO\�XQGHU�VWURQJ�*HUPDQ�SUHVVXUH�±�GHFLGHG�WR�LQYHVW�¦����PLOOLRQ��¼����PLOOLRQ��DQG�WR� JLYH� ORDQ� JXDUDQWHHV��7KLV� ODUJHU� ILQDQFLDO� LQYROYHPHQW�ZDV� WUDQVODWHG� LQWR� D� ODUJHU� VWDWH� VKDUH� IURP��������������WKH�FRPSDQLHV�ZHUH�OHIW�ZLWK������RI�WKH�VKDUHV�������8QWLO�6HSWHPEHU������&HQWHF�*PE+��ORFDWHG�LQ�%HQVEHUJ��:HVW�*HUPDQ\��ZDV�DQ�DVVRFLDWH�FRPSDQ\�RI�8UHQFR�/WG��$V� WKH� WHFKQRORJ\�KROGHU��&HQWHF� FR�RUGLQDWHG� WKH�5'�SURJUDPPH� IRU� WKH� HQWLUH�8UHQFR�*URXS��,W�KDG�WKH�VDPH�%ULWLVK�DQG�'XWFK�VKDUHKROGHUV�DV�8UHQFR�/WG��%1)/�DQG�8&1�UHVSHFWLYHO\��7KH�*HUPDQ�VKDUHKROGHU�ZDV�*HVHOOVFKDIW�I�U�QXNOHDUH�9HUIDKUHQWHFKQLN��*Q9���ZKLFK�ZDV�MRLQWO\�RZQHG�E\�,QWHUQDWLRQDOH�$WRPUHDNWRUEDX�*PE+��,QWHUDWRP��DQG�0$1�$*��8&1�19�EXLOW�WKH�XOWUDFHQWULIXJHV�IRU�8UHQFR�1HGHUODQG�%9�DQG�%1)/�DQG�*Q9�IRU�WKH�VHWWOHPHQWV�LQ�WKH�8.�DQG�*HUPDQ\����6LQFH� WKH� PHUJHU� LQ� 6HSWHPEHU� ����� 8UHQFR� /WG� KDV� WDNHQ� RYHU� WKH� HQULFKPHQW� SODQWV� RI� WKH� 8UHQFR�*URXS�DQG�DOO�UHODWHG�DFWLYLWLHV��7KH�VKDUHKROGHUV�DUH�8UDQLW��8&1�DQG�,1)/��HDFK�IRU�RQH�WKLUG����7KH� DFWLYLWLHV� RI� 8UHQFR� LQ� WKH� 1HWKHUODQGV� DUH� RUJDQLVHG� LQ� 8UHQFR� 1HGHUODQG� %9�� 7KH� (QULFKPHQW�'LYLVLRQ�RI�WKH�FRPSDQ\�RSHUDWHV�WKH�'XWFK�HQULFKPHQW�SODQW�LQ�$OPHOR��DQG�WKH�0DQXIDFWXULQJ�'LYLVLRQ�LV�UHVSRQVLEOH�IRU�WKH�PDQXIDFWXULQJ�RI�FHQWULIXJHV�IRU�WKH�ZKROH�JURXS��,Q�DGGLWLRQ��$OPHOR�LV�WKH�FHQWUH�RI� 8UHQFR� $HURVSDFH�� 8UHQFR� 1HGHUODQG� %9� LV� D� ����� VXEVLGLDU\� RI� 8UHQFR� /WG��� 7KH� RWKHU� WZR�VXEVLGLDULHV�8UHQFR�'HXWVFKODQG�*PE+�DQG�8UHQFR�/WG��RSHUDWH� WKH�XUDQLXP�HQULFKPHQW�SODQWV�����7KH�'XWFK� EUDQFK� RI�8UHQFR�ZDV� EHVW� NQRZQ� DV�8OWUD�&HQWULIXJH�1HWKHUODQGV� �8&1��� &XUUHQWO\�� KRZHYHU��8&1� LV� RQO\� WKH� KROGLQJ� FRPSDQ\� RI� 8UHQFR� 1HGHUODQG� %9�� ,Q� SUDFWLFH� PDQ\� SHRSOH� XVH� WKH� QDPHV�8UHQFR�RU�8&1�IRU�WKH�RSHUDWLQJ�SODQW���7KH�SDVW�ELGV�RQ�8UHQFR��,Q�������GULYHQ�E\�RUGHUV�RI� WKH�(XURSHDQ�&RPPLVVLRQ� WR�FUHDWH� D� VLQJOH�PDUNHW� LQ�HOHFWULFLW\��KROGLQJ�FRPSDQLHV� IRU�3UHXVVHQHOHNWUD�$*��*HUPDQ\¶V�ELJJHVW�QXFOHDU�SRZHU�SURGXFHU�� DQG�5:(�(QHUJLH�$*��WKH�FRXQWU\¶V�ELJJHVW�XWLOLW\��GHFLGHG�WR�VHOO�WKHLU�VKDUHV�LQ�8UDQLW�����6LQFH� WKHQ�� PDUNHW� VRXUFHV� UHSRUWHG�� %1)/� KDV� OLNHZLVH� KHOG� WDONV� ZLWK� *HUPDQ� DQG� 'XWFK� RIILFLDOV�UHJDUGLQJ�WKH�WHUPV�RI�VDOH�RI�UHVSHFWLYHO\�8UDQLW�DQG�8&1�WR�%1)/��$V�DQ�H[LVWLQJ�VKDUHKROGHU��%1)/�DSSHDUHG�WR�EH�LQ�NH\�SRVLWLRQ�WR�DFTXLUH�WKHVH�VKDUHV��$W�WKH�EHJLQQLQJ�RI�1RYHPEHU������LW�ZDV�H[SHFWHG�WKDW� %1)/� ZRXOG� WDNH� RYHU� 8UHQFR����� 7KRXJK� QRW� IRUPDOO\�� &RJHPD� FRXQWHUHG� WKH� %1)/� RIIHU� IRU�8UHQFR�����'XULQJ�D�PHHWLQJ� LQ�$OPHOR�RQ����1RYHPEHU������� WKH�*HUPDQ�JRYHUQPHQW� ODLG�GRZQ�ILYH�SRLQWV�WKDW�LW�ZDQWHG�WR�EH�IXOOILOOHG�E\�%1)/�RU�DQ\�RWKHU�SDUW\�WKDW�ERXJKW�8UDQLW�VKDUHV��,W�GHPDQGHG�D�WKLUG�RI�WKH�SURFHHGV�RI�DQ\�VDOH�RI�8UDQLW�VKDUHV�IURP�8UDQLWV�VKDUHKROGHUV��3UHXVVHQHOHNWUD�DQG�5:(��WKURXJK� D� FKDQJH� LQ� RZQHUVKLS����� $W� WKH� HQG� RI� 1RYHPEHU� ����� %1)/� UHSRUWHGO\� SUHVVHG� 8UHQFRV�*HUPDQ� DQG�'XWFK� VKDUHKROGHUV� WR� VHOO� WKHLU� VKDUHV� RI�8UDQLW� DQG�8&1� WR� WKH�%ULWLVK� FRPSDQ\� E\� ���'HFHPEHU����������$W� WKH�HQG�RI�'HFHPEHU������8UHQFR¶V�*HUPDQ�XWLOLW\�RZQHUV�PDGH�FOHDU� WKDW� WKH\������������������������������������������������������������3 9 5 �8&1��$QQXDO�5HSRUW�������S�����3 9 6 �$QQXDO�5HSRUWV�8UHQFR�������¶����¶����¶���3 9�7 �1XFOHDU)XHO�����-XQH����������3 9 8 �1XFOHDU)XHO����1RYHPEHU�����������3 9%9 �1XFOHDU)XHO�����1RYHPEHU���������3 9 : �1XFOHDU)XHO�����1RYHPEHU����������3 9 ; �1XFOHDU)XHO�����1RYHPEHU���������DQG����

� ���

ILUPO\�RSSRVHG�SODQV�E\� WKH�*HUPDQ�IHGHUDO�JRYHUQPHQW� WR� WDNH�D� WKLUG�RI� WKH�SURFHHGV�DQG� WKDW�%1)/�KDG� QRW� FRPH� FORVH� WR� WKH� DPRXQW� WKDW� WKH� WZR� FRPSDQLHV� FODLPHG� WKH� *HUPDQ� 8UHQFR� VKDUHV� ZHUH�ZRUWK�����6KRUWO\�DIWHUZDUGV�&RJHPD�LVVXHG�D�IRUPDO�ELG�IRU�FRQWURO�RI�8UHQFR�VKDUHV�KHOG�E\�WKH�'XWFK�DQG�*HUPDQ�VKDUHKROGHUV��7KLV�ELG�ZDV�UHSRUWHG�WR�EH�FORVH�WR�GRXEOH�WKH�RULJLQDO�%1)/�ELG��$�PHHWLQJ�EHWZHHQ�&RJHPD�DQG�WKH�*HUPDQ�0LQLVWU\�RI�(FRQRPLFV�ZDV�WDNHQ�DV�D�VLJQ�WKDW�*HUPDQ\�ZDV�ZLOOLQJ�WR�DFFHSW�WKH�)UHQFK�FRPSDQ\�DV�D�ELGGHU�����,Q�0D\������/DXYHUJHRQ�FRQILUPHG�WKDW�&RJHPD�KDG�PDGH�DQ�RIIHU�WR�EX\�DOO�RU�SDUW�RI�WKH�����RI�8UHQFR�XS�IRU�VDOH�DW�WKDW�WLPH��%1)/�ZDV�UHSRUWHGO\�VHHNLQJ�ZD\V�WR�LQFUHDVH�LWV�ELG�IRU�8UHQFR�� LQFOXGLQJ�D� MRLQW�YHQWXUH�ZLWK�86(&�����%1)/�ZDV�DLPLQJ�IRU�FRQWURO�RI�����RI�WKH�VKDUHV�RI�8UHQFR��7KLV�PDMRULW\�RZQHUVKLS�ZRXOG�HQVXUH�WKDW�%1)/�ZRXOG�FRQWURO�8UHQFR¶V�WHFKQRORJ\�VKRXOG�LW�IRUP�D�YHQWXUH�ZLWK�86(&�WR�EXLOG�D�FHQWULIXJH�SODQW�LQ�WKH�86��%HFDXVH�%1)/�ZDV�MRLQHG� E\� &RJHPD� DQG� 86(&� LQ� WKH� FRPSHWLWLRQ� IRU� WKH� 8UHQFR� VKDUHV�� WKH� VKDUHKROGHUV� RI� 8UDQLW�FRQVLGHUHG� VWDUWLQJ� WKH� SURFHVV� DJDLQ� E\� IRUPDOO\� VROLFLWLQJ� RIILFLDO� ELGV� IRU� WKH� VKDUHV�� 7KLV�ZRXOG� QR�GRXEW�KDYH�LQFUHDVHG�WKH�SULFH�����,Q�6HSWHPEHU������LW�ZDV�UHSRUWHG�WKDW�&RJHPD�ZDV�VDLG�WR�KDYH�EHHQ�LQ�WDONV�ZLWK�%1)/�DERXW�D�SRVVLEOH�MRLQW�YHQWXUH�WR�EX\�WKH�VKDUHV��7KH�&DQDGLDQ�XUDQLXP�PLQLQJ�FRPSDQ\�&DPHFR�ZDV�DOVR�UHSRUWHG�WR�EH�LQWHUHVWHG��DQG�FRPPHQWDWRUV�VSHFXODWHG�WKDW�WKH�ELGGLQJ�SURFHVV�PLJKW�OHDG�WR�D�QXPEHU�RI�MRLQW�YHQWXUH�RSWLRQV��DV�QRQH�RI�WKH�LQWHUHVWHG�SDUWLHV��KDV�HQRXJK�PRQH\�WR�EX\�XS�DOO�WKH�VKDUHV��DW�WKH�DVNLQJ�SULFH�������7KRXJK�WKHUH�KDV�QRW�EHHQ�D�VDOH�RI�WKH�'XWFK�DQG�*HUPDQ�VKDUHV�RI�8UHQFR��&RJHPD�QRZ�KDV�DFFHVV�WR�XOWUDFHQWULIXJH� WHFKQRORJ\��&RJHPDV� SDUHQW� FRPSDQ\�$UHYD� KDV�PDGH� D� ILUVW� VWHS� WR� DEDQGRQ� XUDQLXP�HQULFKPHQW�E\�JDVHRXV�GLIIXVLRQ�� ,Q�D�0HPRUDQGXP�RI�8QGHUVWDQGLQJ�������� ��8UHQFR�DQG�$UHYD�KDYH�DJUHHG�WR�GHYHORS�SODQV�IRU�ZRUNLQJ�WRJHWKHU�LQ�WKH�ILHOG�RI�FHQWULIXJH�WHFKQRORJ\�IRU�XUDQLXP�HQULFKPHQW��7KH� FRPSDQLHV� HQYLVDJH� D� ������ MRLQW� YHQWXUH� WR� EXLOG� D� QHZ� FHQWULIXJH� HQULFKPHQW� SODQW� WKDW� ZRXOG�SURJHVVLYHO\� UHSODFH� WKH� H[LVWLQJ�7ULFDVWLQ� SODQW� FDSDFLW\� EHJLQQLQJ� IURP���������� 7KH� QHZ� HQULFKPHQW�SODQW�ZLOO�EH�QDPHG�*HRUJHV�%HVVH� ,,��$FWXDO� FRQVWUXFWLRQ� LV� H[SHFWHG� WR�JHW�XQGHU�ZD\� LQ� HDUO\�������RQFH�JRYHUQPHQW�DXWKRUL]DWLRQV�KDYH�EHHQ�REWDLQHG�DQG�UHOHYDQW�LQWHUQDWLRQDO�WUHDWLHV�KDYH�EHHQ�PRGLILHG�DOORZLQJ�$UHYD�WR�WDNH�DQ�HTXLW\�LQWHUHVW�LQ�(QULFKPHQW�7HFKQRORJ\�&RPSDQ\��(7&���7KLV�LV�VXSSRVHG�WR�EH�GRQH�LQ�WKH��WK�TXDUWHU�RI�������

�2Q����1RYHPEHU�������$UHYD�*URXS�VLJQHG�DQ�DJUHHPHQW�ZLWK�8UHQFR�VKDUHKROGHUV��XQGHU�ZKLFK�LW�ZLOO�DFTXLUH�D�����HTXLW\�LQWHUHVW�LQ�(7&��(7&�FRPSULVHV�DOO�RI�8UHQFRV�FHQWULIXJH�GHVLJQ�DQG�PDQXIDFWXULQJ�DFWLYLWLHV�DV�ZHOO�DV�LWV�5'�LQ�WKH�ILHOG�RI�FHQWULIXJH�HTXLSPHQW�DQG�LQVWDOODWLRQV�IRU�XUDQLXP�HQULFKPHQW�WR�SURGXFH�QXFOHDU�IXHO�������2I�QRWH�LV�WKH�IDFW�WKDW�,UDQ�VWLOO�KDV�D�VKDUH�LQ�(XURGLI����������,Q�WKH�����¶V�WKH�WKHQ�UXOLQJ�6KDK�RI�,UDQ�SODQQHG�WR�EXLOG����QXFOHDU�SRZHU�SODQWV�WKURXJKRXW�,UDQ�E\�WKH�PLG�����V��&RQVHTXHQWO\�LQ������,UDQ�ERXJKW�D�����VKDUH�RI�DQ�HQULFKPHQW�IDFLOLW\�EHLQJ�FRQVWUXFWHG�LQ�)UDQFH� E\� WKH� (XURGLI� FRQVRUWLXP� DQG� ORDQHG�86��� ELOOLRQ� WR� WKH� )UHQFK�$WRPLF� (QHUJ\�&RPPLVVLRQ��&($�� WRZDUG� WKH� FRQVWUXFWLRQ� RI� D� JDVHRXV� GLIIXVLRQ� HQULFKPHQW� IDFLOLW\� DW� 7ULFDVWLQ�� )UDQFH�� 7KHVH�DUUDQJHPHQWV� ZRXOG� KDYH� DOORZHG� ,UDQ� DFFHVV� WR� (XURGLI� HQULFKPHQW� WHFKQRORJ\� DQG� GHOLYHULHV� RI� WKH�KLJKO\�HQULFKHG�XUDQLXP��+(8��SURGXFHG�DW�WKH�7ULFDVWLQ�SODQW�����,UDQ�ZDV�H[SHFWHG�WR�SXUFKDVH�����RI������������������������������������������������������������3?:A< �1XFOHDU)XHO�����'HFHPEHU���������DQG�����3?:�3 �1)�����-DQXDU\���������DQG����3?:4 �8UDQLXP�,QVWLWXWH�1HZV�%ULHILQJ�������_���������0D\��������KWWS���ZZZ�ZRUOG�QXFOHDU�RUJ�QE�QE���QE�����KWP�3?:A5 �1)�����0D\���������DQG�����3?:6 �1)�����6HSWHPEHU����������DQG�����3?: 7 �$UHYD�/HV�(FKRV��2FW����������KWWS���ZZZ�DQWHQQD�QO�ZLVH�XUDQLXP�HSHXU�KWPO�3?:A8 �$UHYD�1RY������������3?: 9 �+DHUL��6DID��,36��7UHDWHG�DV�D�IXWXUH�KHDG�RI�VWDWH��5RKDQL�HQGHG�YLVLW�WR�3DULV�����-DQ����������KWWS���ZZZ�LUDQ�SUHVV�VHUYLFH�FRP�DUWLFOHVB�����-DQB���IUDQFHBLUDQB������KWPO�3?:%: �6FKHLQPDQ��/DZUHQFH��7KH�1XFOHDU�)XHO�&\FOH��$�&KDOOHQJH�IRU�1RQSUROLIHUDWLRQ��'LVDUPDPHQW�'LSORPDF\��,VVXH�1R������0DUFK�$SULO�������KWWS���ZZZ�DFURQ\P�RUJ�XN�GG�GG�����OV�KWP�3?:A; �6NRRWVN\��0DUN�'���86�1XFOHDU�3ROLF\�7RZDUG�,UDQ����-XQH�������

� ���

WKH� ���HQULFKHG� XUDQLXP� IXHO� SURGXFHG� E\� (XURGLI�� ,Q� 6HSWHPEHU� ����� )UDQFH� DQG� ,UDQ� ZHUH� QHDU�DJUHHPHQW�RQ�WKHLU�GLVSXWH�RYHU� WKH�(XURGLI�HQULFKPHQW�SODQW��,UDQ�ZDQWHG�UHSD\PHQW�RI�D�86���ELOOLRQ�ORDQ�WR�)UDQFHV�&($�IRU�,UDQV�SDUWLFLSDWLRQ�LQ�(XURGLI��)UDQFH�ZDQWHG�FRPSHQVDWLRQ�IRU�WKH�HQULFKPHQW�VHUYLFHV� DOORWWHG� WR� ,UDQ��7KH� VHWWOHPHQW�ZLWK�)UDQFH�PLJKW� KDYH� LQFOXGHG�)UHQFK�SDUWLFLSDWLRQ� LQ� ,UDQV�SDUWLDOO\�FRPSOHWHG�%XVKHKU�QXFOHDU�XQLWV�����,Q�������WKH�,QWHUQDWLRQDO�&RPPHUFH�&RPPLVVLRQ�UXOHG�WKDW�)UDQFH�PXVW� UHSD\� WKH� ORDQ�DQG� WKDW� ,UDQ�ZRXOG�NHHS�D�VPDOO� VKDUH�RI�(XURGLI��EXW�)UDQFH�VWDWHG� WKDW� LW�ZRXOG�QRW�VHOO�HQULFKHG�XUDQLXP�WR�,UDQ������

��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������KWWS���ZZZ�DL�PLW�HGX�SHRSOH�ERULV�LUDQ�QXNH�WH[W�3=;%< ����)UDQFH�DQG�,UDQ�PD\�EH�QHDULQJ�DJUHHPHQW���1XFOHDU�1HZV��6HSWHPEHU�������S����E���KWWS���ZZZ�QWL�RUJ�HBUHVHDUFK�H�BLUDQBQFKB�����KWPO�3=;&3 �KWWS���FQV�PLLV�HGX�UHVHDUFK�ZPGPH�IORZ�LUDQ�HQULFK�KWP�

� ���

�$11(;�,,��85(1&2�$1'�7+(�8/75&(175,)8*(��7KH� RULJLQ� DQG� KLVWRU\� RI� 8UHQFR� LV� FORVHO\� OLQNHG� WR� WKH� UHVHDUFK� DQG� GHYHORSPHQW� RI� XOWUDFHQWULIXJH�WHFKQRORJ\��7RJHWKHU�ZLWK�JDV�GLIIXVLRQ� WHFKQRORJ\� LW� LV� WKH�PRVW�XVHG�PHWKRG�RI�XUDQLXP�HQULFKPHQW��(QULFKPHQW� RI� XUDQLXP� LV� SDUW� RI� WKH� SURFHVV� ZKLFK� KDV� WR� WDNH� SODFH� EHIRUH� WKH� PLQHG�� SXULILHG� DQG�FRQFHQWUDWHG�XUDQLXP�HQWHUV�WKH�QXFOHDU�SRZHU�SODQW�LQ�D�QXFOHDU�IXHO�URG�RU�EHFRPHV�WKH�H[SORVLYH�ORDG�RI�D� QXFOHDU�ZHDSRQ�� 7KH� SULQFLSOH� RI� DQ� XOWUDFHQWULIXJH� FRQVLVWV� RI� KLJK� VSHHG� WXUQLQJ� GUXPV��ZKLFK� DUH�FRXSOHG�LQ�D�FDVFDGH�DQG�LQ�ZKLFK�WKH�KHDYLHU�QRQ�ILVVLRQDEOH�XUDQLXP�����LVRWRSH�LV�VHSDUDWHG�IURP�WKH�OLJKWHU�XVDEOH�ILVVLRQDEOH�XUDQLXP������ ,Q� WKH�VHYHQWLHV� WKH�8UHQFR�XOWUDFHQWULIXJH�ZDV�DERXW�RQH�PHWUH�KLJK��&XUUHQWO\�WKH�PRVW�PRGHUQ�8UHQFR�8&¶V�DUH�DURXQG�IRXU�PHWHUV�KLJK�DQG�DUH�PDGH�IURP�VHYHQ�SDUWV��FRQQHFWHG� E\� EHOORZV����� $W� D� FHUWDLQ� QXPEHU� RI� UHYROXWLRQV� SHU� VHFRQG�� FDOOHG� WKH� FULWLFDO� VSHHG�� WKH�FHQWULIXJHV�WHQG�WR�UHVRQDWH�OLNH�D�VWULQJ��&HQWULIXJHV�ZKLFK�URWDWH�DW�ORZHU�VSHHGV�DUH�FDOOHG�VXE�FULWLFDO�FHQWULIXJHV��&HQWULIXJHV�ZKLFK� URWDWH� DW� KLJKHU� VSHHGV� DUH� FDOOHG�XOWUDFHQWULIXJHV��2QO\� VSHFLDO�PDWHULDO�FDQ� ZLWKVWDQG� WKH� H[WUHPH� FHQWULIXJDO� IRUFHV� DW� ZKLFK� XOWUDFHQWULIXJHV� DUH� VXEMHFWHG����� 7R� OHVVHQ� DLU�UHVLVWDQFH�� WKH� XOWUDFHQWULIXJHV� DUH� EXLOW� LQWR� FDVWLQJV�� ZKLFK� DUH� PDGH� YDFXXP�� 7KLV� HQDEOHV� KLJKHU�VSHHGV��$V�VXFK�WKLV�LV�KLJKO\�VHQVLWLYH�WHFKQRORJ\��ZKLFK�WKH�HQULFKPHQW�FRPSDQLHV�WU\�WR�NHHS�VHFUHW����

��7KH�ILUVW�FHQWULIXJHV�IRU�WKH�VHSDUDWLRQ�RI�XUDQLXP�LVRWRSHV����ZHUH�XVHG�IRU�WKH�ILUVW�WLPH�LQ�WKH�86����DQG�IXUWKHU� GHYHORSHG� LQ� 1D]L� *HUPDQ\����� $IWHU� :RUOG� :DU� ,,�� WKH� 5XVVLDQV� WRRN� WKH� OHDGLQJ� FHQWULIXJH�H[SHUWV�=LSSH�DQG�6WHHQEHFN�ZLWK�WKHP�����:LWKLQ�HOHYHQ�\HDUV�WKH\�VXFFHHGHG�LQ�GHYHORSLQJ�VXFK�KL�WHFK�FHQWULIXJHV�WKDW�WKH�5XVVLDQV�ZHUH�DEOH�WR�SURGXFH�+LJK�(QULFKHG�8UDQLXP��+(8��IRU�WKH�PDQXIDFWXUH�RI������������������������������������������������������������3=;�4 �0DU[��3DWULFN��9HUULMNW�8UDQLXP��7HFKQLVFK�:HHNEODG���KWWS���ZZZ�WHFKQLVFKZHHNEODG�QO�LQFOXGH�WHFKDUWL�SURQHG���KWP�3=;%5 �)HGHUDWLRQ�RI�$PHULFDQ�6FLHQWLVW��8UDQLXP�3URGXFWLRQ��KWWS���ZZZ�IDV�RUJ�QXNH�LQWUR�QXNH�XUDQLXP�KWP�3=;�6 �:KLWOH\��:KLWOH\��5HYLHZ�RI�WKH�JDV�FHQWULIXJH�XQWLO�������3DUW�,��3ULQFLSOHV�RI�VHSDUDWLRQ�SK\VLFV��DEVWUDFW���%1)/WG��&DSHQKXUVW�:RUNV��&KHVWHU��(QJODQG��KWWS���SUROD�DSV�RUJ�DEVWUDFW�503�Y���L��S��B��3=; 7 �'DYLG�$OEULJKW�DQG�0DUN�+LEEV��,UDTV�VKRS�WLOO�\RX�GURS�QXFOHDU�SURJUDP��7KH�%XOOHWLQ�RI�WKH�$WRPLF�6FLHQWLVWV��9RO������1R�����$SULO�������KWWS���ZZZ�WKHEXOOHWLQ�RUJ�LVVXHV������D���D���DOEULJKW�KWPO�3=;%8 �.OLQNHQEHUJ��:LP��'H�XOWUDFHQWULIXJH������������9DQ�*HQQHS��,Q�GHQ�7RUHQ�������3=; 9 �,ELG��SS��������

� ���

QXFOHDU�ZHDSRQV��*HUPDQ\��WKH�8.�DQG�WKH�1HWKHUODQGV��UH�VWDUWHG�FHQWULIXJH�UHVHDUFK�DIWHU�::�,,��7KH�VSLULWXDO�IDWKHU�RI�WKH�'XWFK�XOWUDFHQWULIXJH�SURMHFW��SURI��GU��-��.LVWHPDNHU��DFFXVHG�RI�FROODERUDWLRQ�ZLWK�WKH� 1D]LV����� VWDUWHG� SUHSDUDWLRQV� IRU� HOHFWURPDJQHWLF� DQG� XOWUDFHQWULIXJH� LVRWRSH� VHSDUDWLRQ� LQ� WKH�³=HHPDQ�/DERUDWRULXP�$PVWHUGDP´� IURP����������3URJUHVV�ZDV� VORZ��$V� VRRQ�DV� WKH�FHQWULIXJHV�ZHUH�VSLQQLQJ�IDVW�� WKH\�VWDUWHG� WR�H[SORGH��$IWHU�D�IHZ�PHHWLQJV�ZLWK�=LSSH� LQ�*HUPDQ\��ZKR�UHWXUQHG�IURP�5XVVLDQ�FDSWLYLW\�LQ�������KH�SHUFHLYHG�WKDW�=LSSH¶V�FHQWULIXJH�GHVLJQ�ZDV�VXSHULRU� WR� WKH�'XWFK�GHVLJQ�DQG�FRQYLQFHG�KLV�WHDP�WR�VHOHFW�WKH�IRUPHU�DV�D�EDVLV�IRU�IXUWKHU�GHYHORSPHQW�������$IWHU�::�,,�PRVW�(XURSHDQ�FRXQWULHV�PDGH�SODQV�WR�GHYHORS�D�QXFOHDU�ZHDSRQ�SURJUDP��)UDQFH�DQG�WKH�8.� VXFFHHGHG� LQ� GHYHORSLQJ� D� QXFOHDU� ZHDSRQ� FDSDELOLW\�� +RZHYHU�� FRXQWULHV� OLNH� *HUPDQ\�� 6SDLQ��6ZHGHQ�� 6ZLW]HUODQG�� 1RUZD\� DQG� WKH� 1HWKHUODQGV� ZDQWHG� DW� OHDVW� WR� KDYH� WKH� RSWLRQ� RSHQ�� ,Q� WKH�1HWKHUODQGV�� *HUPDQ\�� )UDQFH� DQG� WKH� 8.� UHVHDUFK� ZDV� GRQH� WR� GHYHORS� PHWKRGV� IRU� HQULFKLQJ� RI�XUDQLXP�� )UDQFH� DQG� WKH� 8.� KDG� EXLOW� HQULFKPHQW� SODQWV� EDVHG� RQ� WKH� JDV� GLIIXVLRQ� WHFKQRORJ\�� IRU�PLOLWDU\�XVH�� ,Q������(XUDWRP�ZDV�IRXQGHG�ZLWK� WKH� LQWHQWLRQ� WR�FRQVWUXFW�D�FRPPRQ�(XURSHDQ�QXFOHDU�LQGXVWU\��LQFOXGLQJ�HQULFKPHQW�DQG�UHSURFHVVLQJ�SODQWV��+RZHYHU��WKH�(XUDWRP�FRXQWULHV�ZHUH�GLYLGHG�RQ�WKH�FKRLFH�RI�DQ�HQULFKPHQW�WHFKQRORJ\��)LQDOO\��WKH�WZR�JURXSV�RI�FRXQWULHV�FKRVH�GLIIHUHQW�WHFKQRORJLHV��)UDQFH�� WRJHWKHU� ZLWK� %HOJLXP�� 6SDLQ� DQG� ,WDO\�� GHFLGHG� WR� EXLOG� D� JDV� GLIIXVLRQ� HQULFKPHQW� SODQW� DW�7ULFDVWLQ� LQ� )UDQFH�� 7KLV� FRPSDQ\� LV� FDOOHG� (XURGLI����� *HUPDQ\� DQG� WKH� 1HWKHUODQGV� ZHUH� FORVH� WR�IRUPLQJ� D� MRLQW� YHQWXUH� WR� EXLOG� DQ� XOWUDFHQWULIXJH� HQULFKPHQW� SODQW�� EXW� DIWHU� VRPH� SUHVVXUH� IURP� WKH�8QLWHG�6WDWHV��WKH\�DFFHSWHG�WKH�8QLWHG�.LQJGRP�DV�D�SDUWQHU��%\�GRLQJ�VR�86�LQIOXHQFH�LQ�WKH�(XURSHDQ�FRQVRUWRUWLXP� ZDV� HQVXUHG� �� ,Q� ����� WKLV� WURLND� IRXQGHG� 8UHQFR����� $QRWKHU� ZD\� RI� REWDLQLQJ� ILVVLOH�PDWHULDO� IRU� WKH�PDQXIDFWXUH�RI� QXFOHDU�ZHDSRQV� LV� WR� EXLOG� UHSURFHVVLQJ�SODQWV�� LQ�ZKLFK�SOXWRQLXP� LV�VHSDUDWHG� IURP� VSHQW� QXFOHDU� IXHO�� ,Q� %HOJLXP� D� MRLQW� (XURSHDQ� UHSURFHVVLQJ� SODQW� ZDV� EXLOW� DW� 0RO��)UDQFH� DQG� WKH�8.� EXLOW� WKHLU� RZQ� UHSURFHVVLQJ� SODQWV�� ILUVW� IRU� PLOLWDU\� SURGXFWLRQ� DQG� DIWHUZDUGV� WR�VHSDUDWH�SOXWRQLXP�IURP�FRPPHUFLDO�UHDFWRU�VSHQW�IXHO���7KH�ILUVW�FRXQWU\�HYHU�WR�EXLOG�DQ�XOWUDFHQWULIXJH�HQULFKPHQW�SODQW�ZDV�WKH�6RYLHW�8QLRQ��2WKHU�FRXQWULHV�ZKLFK� KDYH� FRQVWUXFWHG� XOWUDFHQWULIXJH� HQULFKPHQW� SODQWV�� LQ� DGGLWLRQ� WR� WKH� 8.�� WKH� 1HWKHUODQGV� DQG�*HUPDQ\�DUH��%UD]LO��&KLQD��,QGLD��,UDQ��-DSDQ��3DNLVWDQ�DQG�WKH�86����8UHQFR�DQG�WKH�/LJKW�:DWHU�5HDFWRU�'XULQJ�WKH�µVL[WLHV�DQG�µVHYHQWLHV�WKHUH�ZHUH�KLJK�H[SHFWDWLRQV�RI�WKH�JURZWK�RI�QXFOHDU�HQHUJ\�IRU�SRZHU�SURGXFWLRQ��,W�ZDV�FRQVHTXHQWO\�H[SHFWHG�WKHUH�ZRXOG�EH�D�VKRUWDJH�RI�XUDQLXP�HQULFKPHQW�FDSDFLW\�WRR��7KDW�ZDV�RQH�RI� WKH�EDVLF� LGHDV�EHKLQG� WKH� IRXQGLQJ�RI�8UHQFR��7KH�VXSSRVLWLRQ�ZDV�FOHDUO\� WKDW� DOO�RU�PRVW�QXFOHDU�UHDFWRUV�ZRXOG�QHHG�HQULFKHG�XUDQLXP�DV�QXFOHDU� IXHO��+RZHYHU��XQWLO� WKH�VHYHQWLHV� LW�ZDV�QRW�FOHDU�DW�DOO�WKDW�/LJKW�:DWHU�5HDFWRUV���/:5V��ZRXOG�EH�WKH�ZLQQLQJ�GHVLJQ��$�/:5�XVHV�HQULFKHG�XUDQLXP� DV� QXFOHDU� IXHO� DQG� QRUPDO� RU� COLJKW¶� ZDWHU� IRU� FRROLQJ� DQG� IRU� PRGHUDWLQJ� WKH� VSHHG� RI� IDVW�QHXWURQV��HQDEOLQJ�WKHP�WR�VSOLW�RWKHU�XUDQLXP�DWRPV��,Q�:HVWHUQ�(XURSH�DQG�HOVHZKHUH�VHYHUDO�GLIIHUHQW�W\SHV�RI�QXFOHDU�UHDFWRUV�ZHUH�EXLOW��,Q�*HUPDQ\�DORQH�ILYH�GLIIHUHQW�W\SHV�RI�UHDFWRUV�ZHUH�GHVLJQHG�DQG�FRQVWUXFWHG�������������������������������������������������������������3=;�: �,Q������WKH�ILUP�19�&HOODVWLF�ZDV�IRXQGHG��ZKLFK�ZDV�LQ�UHDOLW\�D�VFLHQWLILF�HVSLRQJH�GHSDUWPHQW�RI�WKH�QD]L�LQWHOOLJHQFH�VHUYLFH��&HOODVWLF�ZDV�ILQDQFLDOO\�FORVH�WR�WKH�*HUPDQ�%DQN�5KRGLXV�.RHQLJV��GHDOLQJ�ZLWK�HVSLRQDJH�IRU�DWRPLF�HIIRUWV�RI�WKH�7KLUG�5HLFK�RI�ZKLFK�WKH�XOWUDFHQWULIXJH�ZDV�DQ�LPSRUWDQW�SDUW��'XULQJ�:RUOG�:DU�,,�.LVWHPDNHU�ZDV�D�PHPEHU�RI�WKH�VWDII�RI�WKH�&HOODVWLF�ODERUDWRU\�IRU�QXFOHDU�SK\VLFV�LQ�3DULV�XQGHU�VXSHUYLVLRQ�RI�WKH�*HUPDQ�:HKUPDFKW��5HIHUHQFHV��*RXGVPLW��6DPXHO�$��$/626���WKH�)DLOXUH�LQ�*HUPDQ�6FLHQFH��/RQGHQ�������S���������%DU�=RKDU��0LFKHO���/D�&KDVVH�DX[�6DYDQWV�DOOHPDQGV���������������3DULMV�������S�������FLWHG�LQ�����3=;%; �³'H�JHVFKLHGHQLV�YDQ�KHW�1HGHUODQGVH�8OWUDFHQWULIXJH�3URMHFW´��)20��,QVWLWXWH�IRU�$WRP�DQG�0ROHFXOH�3K\VLFV��������4�<%< �'H�:DDUKHLG��³$O����MDDU�XOWUD�FHQWULIXJH�LQ�1HGHUODQG´�����1RY��������.OLQNHQEHUJ��:LP��³.LVWHPDNHU�HQ�GH�'XLWVH�$�ERP´��&31��1RY��������4�<&3 �6DODQDYH��-HDQ�/XF��HW�DO���³7HFKQRORJLFDO�7UDQVLWLRQ�:LWK�D�/RQJ�7HUP�9LHZ´��(852',)�3URGXFWLRQ��)UDQFH��-DQXDU\�)HEUXDU\�������KWWS���QSM�JRLQIR�FRP�13-0DLQ�QVI���G���F��G�GEIF�EE�����FGE���F�HGF"2SHQ'RFXPHQW&OLFN �4�<�4 �7ZHQWVH�&RXUDQW��³8&�9HUGUDJ�JHWHNHQG´����0DUFK�������.HHVLQJV�+LVWRULVFK�$UFKLHI��³2YHUHHQNRPVW�JDV�XOWUDFHQWULIXJHSURFpGp�RQGHUWHNHQG´��������������0D\�������

� ���

�'XULQJ� WKH� ILIWLHV� DQG� VL[WLHV�� WKH� 8.� DQG� )UDQFH� ILUVW� FRQVWUXFWHG� QDWXUDO� XUDQLXP� UHDFWRUV� IRU� WKHLU�QXFOHDU�ZHDSRQ�SURJUDPPHV��ZKLFK�GR�QRW�QHHG�HQULFKHG�XUDQLXP��7KHVH�UHDFWRUV�GR�QRW�XVH�OLJKW�ZDWHU�IRU�PRGHUDWLQJ��EXW�KHDY\�ZDWHU�RU�JUDSKLWH�DQG�JDV�DV�D�FRRODQW��QRUPDO�DLU�RU�FDUERQ�GLR[LGH���7KH\�ZHUH�HVSHFLDOO\�GHVLJQHG�WR�SURGXFH�ZHDSRQ�JUDGH�SOXWRQLXP�DQG�HOHFWULFDO�SRZHU�DW�WKH�VDPH�WLPH��VR�FDOOHG�µGXDO�XVH¶�UHDFWRUV��7KDW�LV�ZKDW�WKH\�ZHUH�XVHG�IRU�LQ�WKH�8.��)UDQFH��5XVVLD��&KLQD�DQG�ODWHU�RQ�LQ�1RUWK�.RUHD��7KH�SOXWRQLXP�FUHDWHG�LQ�WKH�UHDFWRU�ZDV�DIWHUZDUGV�VHSDUDWHG�IURP�WKH�XVHG�QXFOHDU�IXHO�� 7KLV� KDSSHQHG� LQ� UHSURFHVVLQJ� SODQWV�� OLNH� WKRVH� VWLOO� IXQFWLRQLQJ� DW� OD� +DJXH� LQ� )UDQFH�� DQG� DW�6HOODILHOG� LQ� WKH� 8.�� 1DWXUDO� XUDQLXP� UHDFWRUV� KDYH� WKH� UHODWLYH� DGYDQWDJH� RI� QRW� QHHGLQJ� HQULFKHG�XUDQLXP��&DQDGD�GHYHORSHG�WKH�&$1'8�UHDFWRU�GXULQJ�WKH�µILIWLHV�ZKLFK�XVHV�QDWXUDO�XUDQLXP�DQG�ZKLFK�LV�FRROHG�DQG�PRGHUDWHG�E\�KHDY\�ZDWHU����7KH�PDMRULW\�RI� WKH�HDUO\�UHDFWRU� W\SHV�GLG�QRW�XVH�HQULFKHG�XUDQLXP��6R�ZK\�GLG� WKH�/:5�EHFRPH�WKH�GRPLQDQW�UHDFWRU�W\SH"�������7KHUH�DUH�IRXU�PDLQ�UHDVRQV�ZK\�WKLV�KDSSHQHG��7KH�ILUVW�LV�WKH�IDFW�WKDW�WKH�86$�1DY\�ZDQWHG�WR�GHYHORS�QXFOHDU�UHDFWRUV�IRU�SURSXOVLRQ�RI�WKHLU�QXFOHDU�VXEPDULQHV��WKH�DGYDQWDJH�EHLQJ�WKDW�WKH�VXEV�FRXOG�VWD\�XQGHU�ZDWHU�IRU�PRQWKV��7KH\�FRXOG�QRW�XVH�D�QDWXUDO�XUDQLXP�UHDFWRU��EHFDXVH�LW�QHHGV�DW�OHDVW�D�KXQGUHG�WRQQHV�RI�XUDQLXP�DV�IXHO��%XW�LI�RQH�XVHV�HQULFKHG�XUDQLXP��OHVV�QXFOHDU�IXHO�LV�QHHGHG��7KH�PRUH�KLJKO\�HQULFKHG� WKH� IXHO� LV�� WKH� OHVV� IXHO� RQH� QHHGV��$� ���0HJD:DWW� >0:@�/:5� UHDFWRU� RQ� ERDUG� D� QXFOHDU�VXEPDULQH�ZKLFK�XVHV�+(8��HQULFKHG�WR�����XUDQLXP������RQO\�QHHGV�DERXW����NJ�+(8�IXHO��:KHQ�D����0:�UHDFWRU�XVHV�/(8��HQULFKHG�WR����8������DV�IXHO��LW�QHHGV�DERXW������NJ�IXHO���1RW�VXUSULVLQJO\�� WKH�86�1DY\�GHYHORSHG�WKH�/:5�IRU� WKH�1DXWLOXV�� WKH�ILUVW�QXFOHDU�VXEPDULQH�EXLOW� LQ��������7KH�VHFRQG�LV�WKDW�DIWHU�WKH�µ$WRPV�IRU�3HDFH¶�VSHHFK�RI�3UHVLGHQW�(LVHQKRZHU�LQ�������WKH�86�GHFLGHG�WR�GHFODVVLI\�VRPH�QXFOHDU�NQRZ�KRZ��VR�LW�FRXOG�EH�XVHG�IRU�µSHDFHIXO¶�SXUSRVHV�WR�SURGXFH�HOHFWULFDO�SRZHU�LQ�FLYLO�QXFOHDU� UHDFWRUV��%XW�XQWLO� WKHQ�QXFOHDU�HQHUJ\�ZDV�RQO\�XVHG� IRU� WKH�PLOLWDU\�DQG�QR�VXFK�FLYLO�QXFOHDU� UHDFWRU� ZDV� GHYHORSHG� LQ� WKH� 86$�� $IWHU� WKH� $WRPV� IRU� 3HDFH� SURJUDPPH� ZDV� DQQRXQFHG�� D�FRPPHUFLDO� UHDFWRU�KDG� WR�EH�GHYHORSHG� WR�PDNH� WKH�PHVVDJH�FUHGLEOH��7KH�86�ZDV�FRQFHUQHG� WKDW� WKH�8665�ZRXOG�EH�ILUVW� LQ�GHYHORSLQJ�D�FRPPHUFLDO�QXFOHDU�UHDFWRU�DQG�RIIHU� LW� WR�RWKHU�FRXQWULHV��)RU� WKH�86$�JRYHUQPHQW� WKDW�ZRXOG� EH� D� SROLWLFDO� DQG� HFRQRPLFDO� GLVDVWHU�� ,W�ZDV� WKHUHIRUH� HVVHQWLDO� IRU� LW� WR�GHYHORS�D�FRPPHUFLDO�UHDFWRU�DV�VRRQ�DV�SRVVLEOH�WR�RIIHU�WR�FRXQWULHV�ZLOOLQJ�WR�VLJQ�XS�WR�WKH�$WRPV�IRU�3HDFH� 3URJUDP�� 7KHLU� PLOLWDU\� UHDFWRUV� ZHUH� QRW� IRXQG� VXLWDEOH� IRU� FRPPHUFLDO� XVH�� WKH\� ZHUH� QRW�GHVLJQHG�WR�SURGXFH�SRZHU�EXW�WR�SURGXFH�ZHDSRQ�JUDGH�SOXWRQLXP��7KH�RQO\�UHDFWRU�W\SH�DYDLODEOH�WKDW�FRXOG� EH� GHYHORSHG� LQ� D� VKRUW� WLPH� IRU� FRPPHUFLDO� XVH�ZDV� WKH�/:5�� ,W� FRXOG� EH� EXLOW�ZLWKRXW�PDMRU�GHYHORSPHQW�FRVWV��DV�WKH�PLOLWDU\�KDG�DOUHDG\�SDLG�IRU�LWV�LQLWLDO�GHYHORSPHQW����7KH�WKLUG�UHDVRQ�ZK\�WKH�86$�FKRVH�WKH�/:5�ZDV�EDVHG�RQ�LWV�QRQ�SUROLIHUDWLRQ�SROLF\��LW�ZDV�QRW�LGHDOO\�VXLWHG�WR�WKH�SURGXFWLRQ�RI�ZHDSRQV�JUDGH�SOXWRQLXP����$QG� ILQDOO\�� WKH� 86� KDG� DQ� RYHUFDSDFLW\� RI� XUDQLXP� HQULFKPHQW� SODQWV�� ZKLFK� FRXOG� QRZ� EH� XVHG� WR�SURGXFH� /(8� IRU� WKH� /:5V�� 7KH� 86� WKXV� FUHDWHG� D� PRQRSRO\�� LW� ZDV� WKH� RQO\� FRXQWU\� WKDW� FRXOG�JXDUDQWHH� WKH� GHOLYHU\� RI� XUDQLXP� DQG� RI� HQULFKPHQW� VHUYLFHV�� 7RJHWKHU� ZLWK� WKH� 8.�� &DQDGD� DQG�$XVWUDOLD�WKH\�IRUPHG�D�XUDQLXP�FDUWHO������$OWKRXJK�WKH�6RYLHW�8QLRQ�EXLOW�WKH�ILUVW�UHDFWRU�WKDW�SURGXFHG�HOHFWULFDO�SRZHU�LQ�������WKH�86�IROORZHG�LQ������ZKHQ�WKH�6KLSSLQJSRUW�/:5�FDPH�LQWR�RSHUDWLRQ�����2QFH�GHYHORSHG��WKH�86�FLYLO�QXFOHDU�UHDFWRU������������������������������������������������������������4�<%5 �$W�WKH�PRPHQW�DERXW�����RI�DOO�QXFOHDU�SRZHU�SODQWV�DUH�/:5¶V��4�<�6 �.ROOHUW��'LH�3ROLWLN�GHU�ODWHQWHQ�3UROLIHUDWLRQ��������'89��S���������4�< 7 �.ROOHUW��S�������

� ���

LQGXVWU\�ZDV�HQFRXUDJHG�WR�EXLOG�/:5V��7KH�FRPPHUFLDO�EUHDNWKURXJK�ZDV�UHDFKHG�LQ�������ZKHQ�D�1HZ�-HUVH\�HQHUJ\�FRPSDQ\�RUGHUHG�WKH�2\VWHU�&UHHN�/:5��%\������PRUH�WKDQ����QXFOHDU�SRZHU�SODQWV�ZHUH�RUGHUHG�LQ�WKH�86�����7KH�VDPH�GHYHORSPHQW�WRRN�SODFH�LQ�WKH�6RYLHW�8QLRQ��,W�WRR�XVHG�HQULFKHG�XUDQLXP�RQ�ERDUG�LWV�QXFOHDU�VXEPDULQHV��GHYHORSHG�DQG�H[SRUWHG�/:5V���$W� WKDW� WLPH� WKH� 86� $WRPLF� (QHUJ\� &RPPLVVLRQ� KDG� EXLOW� WKUHH� JLDQW� DQG� YHU\� H[SHQVLYH� XUDQLXP�HQULFKPHQW�SODQWV��XVLQJ�JDV�GLIIXVLRQ�WHFKQRORJ\��RQH�RI�ZKLFK�LV�VWLOO�RSHUDWLQJ�WRGD\��%\������WZR�RI�WKHP�ZHUH�SXW�RQ�VWDQGE\��DV�WKH\�ZHUH�QR�ORQJHU�QHHGHG�IRU�WKH�SURGXFWLRQ�RI�+(8�IRU�QXFOHDU�ZHDSRQV��%\�WKLV�GDWH�WKHUH�ZHUH�KXJH�VWRFNSLOHV�RI�+(8������)URP� WKH� LQGXVWU\¶V� SHUVSHFWLYH�� LW�ZDV� D� ORJLFDO� DQG� OXFUDWLYH� VWHS� WR� H[SRUW� /:5V� DQG� XVH� WKH� LGOHG�SODQWV�IRU�WKH�SURGXFWLRQ�RI�HQULFKHG�XUDQLXP��7KH�LPSRUWLQJ�FRXQWULHV�FRXOG�EX\�/:5V�IURP�WKH�86�RU�JHW�D�OLFHQVH�WR�EXLOG�WKHP�WKHPVHOYHV��7KH�86�JXDUDQWHHG�D�OLIH�ORQJ�VXSSO\�RI�HQULFKHG�XUDQLXP��7KLV�KDG�WKH�GHOLEHUDWH�VLGH�HIIHFW�RI�JLYLQJ�WKH�86�FRQWURO�RI� WKH�VSHQW�QXFOHDU�IXHO�DQG�WKHUHE\�DOVR�FRQWURO�RYHU�SUROLIHUDWLRQ��:LWKRXW�SHUPLVVLRQ� IURP� WKH�86�� WKH�VSHQW� IXHO�FRXOG�QRW�EH� UHSURFHVVHG� WR�SURGXFH�SOXWRQLXP������,Q� OHVV� WKDQ� D� GHFDGH� PRVW� :HVWHUQ� FRXQWULHV� WKDW� ZHQW� QXFOHDU�� FKRVH� WKH� /:5�� $OPRVW� WKH� VDPH�KDSSHQHG� LQ� WKH� 6RYLHW�8QLRQ� DQG� (DVWHUQ� (XURSH�� WKH\� WRR� RIIHUHG� HQULFKPHQW� VHUYLFHV� IRU� VDOH�� 7KH�HQHUJ\�FRPSDQLHV�ZHUH�WR�EX\�WKH�XUDQLXP�WKHPVHOYHV�DQG�WR�VKLS�LW� WR�WKH�6RYLHW�8QLRQ��6XFK�ZDV�WKH�H[SHFWHG� GHPDQG� IRU� XUDQLXP� HQULFKPHQW� VHUYLFHV� WKDW� PDQ\� FRXQWULHV� SODQQHG� WR� EXLOG� WKHLU� RZQ�HQULFKPHQW�SODQWV��&DQDGD��$XVWUDOLD��-DSDQ��)UDQFH��*HUPDQ\��WKH�8.�DQG�WKH�1HWKHUODQGV������

�����������������������������������������������������������4�<%8 �.ROOHUW�S�������4�< 9 �%XOOHWLQ�RI�$WRPLF�6FLHQWLVWV��$SULO������S����4�<�: �.ROOHUW��S�����

� ���

�������������������������������������������������

3XEOLVKHG�E\�*UHHQSHDFH�,QWHUQDWLRQDO�2WWKR�+HOGULQJVWUDDW��������$=�$PVWHUGDP�7KH�1HWKHUODQGV�

ZZZ�JUHHQSHDFH�RUJ���

0D\������